Taiwan’s stocks fell the most in six weeks after disappointing earnings from Acer Inc. quelled a rally that drove the benchmark index to the cusp of a bull market.
The Taiex Index slid 1.8 percent to 8,693.57 at the close, the steepest loss since Sept. 23. Acer, a computer maker, tumbled 6 percent after posting an operating loss in the third quarter. Liquid crystal display maker AU Optronics Corp. sank 3.8 percent after October sales fell. The stock gauge has rebounded 17 percent from this year’s low on Aug. 24.
Friday’s decline comes a day before a historic summit between Chinese President Xi Jinping and the island’s counterpart Ma Ying-jeou, the first meeting between top leaders of the two sides in seven decades. The government said last week the economy contracted in the third quarter for the first time since 2009, as exports slumped and consumption fell amid a sluggish global recovery.
“Some industries are in bad shape,” said Michael On, president at Beyond Asset Management Co. in Taipei. “Investors are worried about the economic outlook next year.
The Taiex’s 14-day relative strength index, measuring how rapidly prices have advanced or dropped during a specified time period, rose to 67.9 this week, near the 70 threshold indicating stocks may fall. The gauge is valued at 12.7 times its 12-month projected earnings, lower than the five-year average of the multiple of 13.6, according to data compiled by Bloomberg.
— With assistance by Shidong Zhang