Taiwan stocks have risen more than 7 percent since the end of December, advancing faster than regional peers such as Shanghai and Hong Kong and raising fears some stocks may now be overvalued. "Profit taking is one major reason major tech shares fell today," said Kevin Lin, vice-president with Fuh Hong Financial Planning.
Chi Mei Optoelectronics, Taiwan's No 2 LCD maker, slipped 4.06 percent and larger rival AU Optronics, was down 2.75 percent, dragging the optoelectronics sub-index 2.61 percent lower. Other major tech shares also fell, with Asustek down 3.86 percent and Compal Electronics down 2.26 percent, with the electronics sub-index 1.33 percent lower.
TSMC, the world's largest contract chipmaker, dropped 0.64 percent after the firm's chairman said its research and development expenses were expected to climb 25 percent this year, driven by returning demand for tech products. "The largest investors in TSMC are foreign investors and Taiwan's government funds, and its shares fell as Taiwan's National Stabilisation Fund sold local stocks," said Alan Tseng, vice-president with Capital Securities.
Taiwan's National Stabilisation Fund has decided that its steering committee could sell the T$60 billion ($1.9 billion) it has invested in local stocks over the next three months, local media reported on Saturday. Cathay Financial, Taiwan's top listed financial holding firm, gained 1.36 percent after a source told Reuters that ICBC intended to take a 50 percent stake in the Taiwanese firm's Shanghai life insurance unit. Shin Kong Financial, parent of Taiwan's No 3 insurer, jumped 3.01 percent.
"Investors are optimistic that maybe the firm will also have tie-ups with Chinese banks in the future," said Tseng. Qisda Corp ended down 1.24 percent after a newspaper report that it would sell its stakes in Darfon and Gallant in a deal estimated at about T$4.25 billion to improve the company's cash flow and financial position. China Life, Taiwan's No 5 insurer, ended flat after the company said on Monday it was in talks with two to three Chinese firms to form an insurance tie-up as it aims to tap the huge mainland market.