Taiwan stocks extend losses, tech exporters fall

* Exporters fall after weaker U.S. consumer confidence data

* China plays rise on hopes of economic pact with China

* Asustek extends Tuesday's gains on upbeat quarterly results

* Acer falls even after expecting rising shipments (Updates indexes, adds quotes and hot stocks)

TAIPEI, Oct 28 - Taiwan stocks fell 0.42 percent on Wednesday, as weaker-than-expected U.S. consumer confidence raised doubts over the strength of the economic recovery and weighed on exporters including Hon Hai <2317.TW>.

As of 0200 GMT, the main TAIEX share index <.TWII> had fallen 31.85 points to 7,625.49. The heavily weighted electronics sub-index <.TELI> fell 0.37 percent.

"Consumer confidence and the jobless rate are still falling in the United States, and people are going to be very careful when they shop for this holiday season," said Alvin Tang, an assistant research manager at Sinopac Securities.

Concerns over a slower fourth quarter for the technology sector have begun to kick in, weighing on shares of major exporters such as TSMC <2330.TW> and Hon Hai <2317.TW>.

TSMC, the world's largest contract chipmaker, fell 0.3 percent, while electronics parts giant Hon Hai dropped 1.45 percent.

But notebook PC makers that reported upbeating quarterly results and offered an optimistic outlook outperformed.

Netbook pioneer Asustek <2357.TW> extended gains in the previous session, rising more than 1 percent after the company reported better-than-expected third-quarter earnings, while the launch of Windows 7 is also expected to boost to PC sales. [ID:nTP262252]

But analysts warned against anticipating a further rise in PC shares.

"I wouldn't take an interest in PC shares right now because, one: they have risen by too much, and two: we don't know that demand from North American has truly picked up," said Tang.

Asustek's larger rival Acer <2353.TW>, the world's No.2 PC brand, fell 1.58 percent. The computer and peripheral equipment sub-index <.TCPI> traded nearly flat.

Acer Chief Executive Gianfranco Lanci said the company expected shipments of portable PCs to exceed 30 million units this year. [ID:nTPU001789]

China plays including tourism companies <.THOI> and transport shares <.TTPI> rose 0.59 percent and 0.11 percent, respectively, on continued expectation of a much-anticipated economic pact between Taiwan and China.

Taiwan and China will put a free trade agreement-like deal on the agenda when their top negotiators meet next year, raising the possibility that the pact will be signed then. [ID:nTP320730]

HOT STOCKS

-- Chunghwa Telecom <2412.TW> fell 0.17 percent after a newspaper reported that it may spend about T$10 billion to buy a stake in Asia-Pacific Telecom.

-- Cathay Financial <2882.TW>, the island's top listed financial holding firm, fell 0.66 percent after a local newspaper reported that one of its units had signed a two-year agreement to provide consulting services to Chinese investment fund ChinaAMC.

For a table of foreign trading in Taiwan stocks, double-click on [ID:nTP170358]