Taiwan stocks off 2-mth high as Hon Hai slumps

* Market retreats from 2-mth closing high as techs weigh

* Hon Hai drops after posting worse-than-expected Q4 results

* PC shares down after iSuppli cuts forecast on PC growth

* UMC down ahead of February sales (Updates indexes, adds details and quote)

TAIPEI, March 9 - Taiwan stocks fell 1.19 percent on Monday, with Hon Hai <2317.TW> leading technology shares lower after the electronics parts giant posted worse-than-expected fourth-quarter results.

Shares of Hon Hai, Taiwan's top electronics gear maker, dropped by their 7 percent daily limit after the firm's 2008 fourth-quarter net profit fell 65 percent from the year before. [ID:nL6945742]

"Investors have turned conservative after Hon Hai's news, which dragged down other tech shares today," said Wang Kao-hsiung, a vice president of KGI Securities.

"The market's recent strong performance might come to an end if investors take Hon Hai's results as a negative sign for the sector's outlook and turn pessimistic again," said Wang, who expected the TAIEX to trade between 4,400-4,700 points this week.

Shares of Hon Hai were further pressured as Foxconn <2038.HK>, a contract cellphone making unit of Hon Hai, saw its net profit fall 83 percent in 2008. [nHKG14361]

Shares of United Microelectronics Corp (UMC) <2303.TW> <UMC.N>, the world's No. 2 contract chip maker, fell 0.83 percent before it releases February sales later in the day.

The computer sub-index <.TCPI> fell 0.75 percent after research firm iSuppli lowered its growth forecast for worldwide PC shipments to 0.7 percent from 4.3 percent previously. [ID:nTP177691]

Shares of Acer <2353.TW>, the world's No. 3 PC vendor, declined 1.26 percent.

However, the tourism sub-index <.THOI> jumped 3.18 percent, bucking the broader weakness on hopes that more Chinese tourists will visit the island.

Shares of hotel operators Ambassador Hotel <2704.TW> and Leofoo Development Co <2705.TW> both rose more than 4 percent.

Another bright spot was the construction sub-index <.TCOI>, which gained 2.63 percent after a newspaper reported Taiwan will spend almost T$600 billion ($17.3 billion) on public infrastructure projects this year to boost its economy, the highest amount on record.

HOT STOCKS

-- Formosa Plastics <1301.TW>, Teco <1504.TW> and China Steel <2002.TW> will work with other companies to enter the wind energy market in China, a local newspaper reported.

Shares of Formosa Plastics rose 0.31 percent. Teco rose 1.22 percent but China Steel fell 2.05 percent.

For a table of foreign trading in Taiwan stocks, double-click on [ID:nTP170358] (US$1=T$34.8)