Taiwan stocks closed lower on Monday as worries over the re-emergence of Sars in China fuelled selling in tech shares like TSMC, offsetting optimism that local listed firms would report improved quarterly profits.
The TAIEX share index officially ended down 0.55 percent at 6,710.70, taking a breather after surging 10 percent over the past month in a rally that was partly boosted by gains in US stocks.
Turnover fell to T$107.63 billion from T$127.8 billion on Friday, reflecting the market's cautious mood.
"Investor confidence was hurt by Sars fears even though we haven't yet seen any cases in Taiwan," said Alex Huang, assistant vice president at Barits International Securities.
The bellwether electronics sub-index dropped 0.43 percent and the financial sector was off 0.59 percent. China reported four new suspected cases of the potentially deadly Severe Acute Respiratory Syndrome (Sars) in Beijing on Sunday, after the first reported death from the virus since a major outbreak last year.
Taiwan's health ministry has asked travellers from Sars-infected areas to take their own temperatures daily. The island suffered the world's third-worst outbreak of Sars last year, largely due to its strong trade connections with China.
Microchip shares bore the brunt of the sell-off as investors switched back into the shares of LCD screen makers after pocketing some profits last week.
Taiwan Semiconductor Manufacturing Co (TSMC), the market's most heavily weighted stock, dropped 0.78 percent to T$63.50 and rival United Microelectronics Corp (UMC) gave up early rises to end down 0.59 percent at T$33.80.
Both shares had gained last week on analyst forecasts that they would post huge jumps in first-quarter profits as demand for consumer gadgets stretches production lines to the limit.
Display screen maker AU Optronics jumped 4.14 percent to T$75.50 and Chunghwa Picture Tubes added 0.88 percent to T$23.00 as investors bet that rising demand would boost their first-quarter profits.
Mediatek Inc, the world's largest provider of DVD chips, finished unchanged at T$341.00, before the firm posted a 10.3 percent year-on-year rise in first quarter profit minutes after close of trade.
The over-the-counter TAISDAQ index lost 1.02 percent to 150.81, while May TAIEX index futures fell 0.44 percent to 6,720.
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