TAIEX declines 4.9 points, 0.1 percent

Taiwan stocks plunged at the beginning of trade yesterday, as the Dow Jones Industrial Average fell 249 in Friday trading. At the same time, investors panicked on reports that a meeting between Taiwan and Chinese trade officials on an economic cooperation framework agreement (ECFA) will be delayed.

An ECFA is in essence a free trade agreement between Taiwan and China. With an ECFA in place, Taiwan can compete on an equal footing with Southeast Asian nations once China joins the ASEAN Plus One framework starting next year.

While the deputy minister of economic affairs sought to calm investors by saying the meeting will be delayed only for two to three days, the TAIEX was still down by about a 100 points. Investors' confidence began to show only after Lee Sush-der, finance minister, said government funds will keep an eye on the stock market.

When asked whether the National Stabilization Fund is ready to enter the market, Lee said the recent stock decline does not merit its entry. The stabilization fund enters the market only during sharp declines that are caused by non-economic factors, he said.

Analysts pointed out the current correction may be prolonged, and asked investors to buy low companies that reported good Q3 results.

In individual stocks, Acer Inc. lost 1.3 percent to NT$77 after the world's second-largest computer supplier said notebook shipments may drop 15 percent next quarter from the current three-month period.

China Airlines Ltd. lost 2 percent to NT$10.05, the lowest since March 12, after Taiwan's largest airline posted a third-quarter loss of NT$2.62 billion, missing the NT$488 million median of seven analyst estimates compiled by Bloomberg.

EVA Airways Corp. lost 2.8 percent to NT$12.05, the lowest in one month, after Taiwan's second largest carrier posted a third-quarter loss of NT$2.22 billion, worse than the NT$609 million median of seven analysts compiled by Bloomberg.

Quanta Computer Inc. climbed 4 percent to NT$65, the most in four weeks, after the world's second-largest maker of notebook computers by shipments posted third-quarter profit of NT$6.11 billion, beating the NT$5.1 billion median of 13 analyst estimates compiled by Bloomberg.

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