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Taiwan shares plunge in mid-morning trading

Taiwan shares plunge in mid-morning trading

Taipei, Aug. 21 (CNA) Taiwan shares took a beating Friday morning as investor confidence was badly bruised by a dive on Wall Street overnight amid concerns over the global economic climate, dealers said. Investors shrugged off the government's announcement of short-term economic stimulus measures on Thursday and continued to unload large-cap stocks, in particular in the financial and electronics sector, to send the index even lower, they said. As of 10:51 a.m., the weighted index on the Taiwan Stock Exchange had fallen 2.41 percent to 7,836.27 on turnover of NT$46.85 billion (US$1.44 billion). The financial sub-index was down 2.23 percent, and the bellwether electronics sector was 2.55 percent lower. "After the heavy losses incurred on Wall Street overnight, it was no surprise that major regional stock markets, including in Taipei, encountered heavy downward pressure today," Hua Nan Securities analyst Kevin Su said. The Dow Jones Industrial Average fell 2.06 percent to close below the 17,000-point mark for the first time since October 2014, and the tech-heavy Nasdaq shed 2.8 percent, as a further slide in crude oil prices reinforced bearish sentiment over the global economy. "Falling crude oil prices indicated weakening global demand, and slowing global demand pointed to a struggling world economy, in particular as growth in China shows signs of moderating," Su said. "In such an unfavorable environment, investors tended to cut their holdings for the time being." The Executive Yuan unveiled a series of economic stimulus measures on Thursday, including a plan by the Financial Supervisory Commission to ease restrictions on banks investing in the stock market and a hike in the daily limit of the number of independent Chinese travelers allowed to visit Taiwan. The Cabinet has even agreed to set up a NT$20 billion special fund to help domestic enterprises make acquisitions to strengthen their global competitiveness. "But with the volatility seen in the global equity markets, these measures have been ignored for the moment. What investors want now is something that will stop the losses," Su said. The financial sector was the focus of selling Friday as investors feared financial institutions will face losses on their equity holdings at a time of heavy market volatility and also see the value of their yuan-denominated assets fall as the Chinese yuan weakens. Among the falling financial stocks, Fubon Financial Holding Co. (???) had lost 2.72 percent to NT$50.00 and Cathay Financial Holding Co. (???) had shed 2.61 percent to NT$42.85 as of 10:51 a.m. In the electronics sector, Taiwan Semiconductor Manufacturing Co. (???), the most heavily weighted stock in the local market, had dropped 2.78 percent to NT$122.50, and smartphone camera lens supplier Largan Precision Co. (???) had lost 3.86 percent to NT$2,740.00. Su said that selling in high-tech stocks simply followed a plunge on the Nasdaq index overnight as concerns over global demand for electronics gadgets continue to mount. "Judging from the fall of these large-cap stocks, I suspect that foreign institutional investors are on the sell side. Amid such a gloomy attitude, it is hard to say where the local market will find technical support," Su said. (By Frances Huang)


Updated : 2021-09-22 16:28 GMT+08:00