Taiwan stocks retreat as computer makers tumble

* TAIEX fell 0.68 pct

* Expect consolidation this week, Wall Street provides
support-analyst

(Adds details and analyst comment)

By Clare Jim

TAIPEI, March 28 (Reuters) - Taiwan stocks had eased by more
than 0.6 percent by mid-session on Monday, with investors
offloading computer plays after Acer Inc said
it expected worse-than-expected first-quarter sales and a flat
second quarter. [ID:nL3E7EP1RZ]

Analysts said the main index might consolidate by a
small range this week after rising about 600 points last week,
yet supported by the firm momentum of U.S. shares. They also
said funds would continue to be parked in Taiwan after foreign
investors were net buyers for the last two sessions.

"There are different levels of attractiveness in the market
and sectors are taking turns to outperform, so money will still
stay in Taiwan," said Masterlink Investment Advisory
vice-president Tom Tang.

He added that he expected the TWII to face pressure at 8,756
and trade in range at that level.

"As long as the U.S. market is stable, foreign investors
will keep loading up on heavy-weights such as Taiwan
Semiconductor Manufacturing Co Ltd ," Tang said.

At 0201 GMT, the main TAIEX index as down 42.17 points, or
0.49 percent, at 8,568.22 after opening down 0.26 percent.

Computer counters were the biggest losers, down 3.13
percent, with Acer plunging 6.9 percent after the company said
its first-quarter sales to date were 10 percent lower than the
previous quarter.

Rival Asustek Computer Inc tumbled 5.13 percent
while Compal Electronics Inc dropped 5.2 percent.

Financial shares were flat on an expected rate hike
in the central bank meeting on Thursday.

The glass and ceramics sub-index topped the index,
rising 2 percent.

The Taiwan dollar was flat at T$29.5 in early
trading.

Foreign investors bought a net T$12 billion ($407 million)
in Taiwan stocks on Friday, their biggest buying so far this
month. [ID:nL3E7EL0TS]

For a Reuters poll on the outlook for the Taiex index in
2011 click on for a story and for the
poll data.

ASIA-PACIFIC STOCK MARKETS:
Pan-Asia...... Japan........ S.Korea....
S.E. Asia............ Hong Kong... Taiwan.....
Australia/NZ......... India....... China......

OTHER MARKETS:
Wall Street........... Gold......... Currency..
Eurostocks........... Oil........... JP bonds...
ADR Report.......... LME metals.. US bonds...
Stocks News US... Stocks News Europe...

DIARIES:
Asia earnings diary U.S. earnings diary
Wall Street Week Ahead Global Week Ahead
World forecasts
Asia Macro data

TOP NEWS:
For top Asian company news, double click on:
U.S. company news European company news
Forex news Global economy news
Technology, media Financial services
Political risk
A multimedia version of Reuters Top News is available at:
topnews.session.rservices.com

LIVE PRICES & DATA:World Stocks <0#.INDEX>
Currency rates
Dow Jones/NASDAQ Nikkei
FTSE 100 Debt <0#USBMK=>
Taiwan dollar LME price overview

TAIWAN MARKET:
Taiwan equity market TAIEX
Other indices <0#.INX.TW> TAISDAQ
TAIMEX Taiwan index futures <0#TX:>
MSCI Taiwan index
SIMEX Taiwan index futures <0#STW:>
FTSE TW50 index

(Editing by Chris Lewis)