Taiwan stock market suffers largest one-day loss in history after Dow plunge

TWSE plunges below the 10,000 points mark to become the worst performer in Asia after the Dow's disastrous day


(AP photo)

TAIPEI (Taiwan News) - After the Dow Jones industrial average plunged by 831 points or 3.15 percent on Wednesday, Taiwan's stock market also dropped by over 600 points, roughly 6 percent, on Thursday.

Asia markets fell sharply Thursday morning following Wednesday's 831-point tumble for the Dow Jones Industrial Average, with the stock indexes in Tokyo, Seoul, Shanghai, Hong Kong, and Taipei all down more than 3 percent at the start of Thursday's trading session.

The Taiwan Stock Exchange Weighted Index (TWSE) plunged below the 10,000-point mark to become the worst performer in Asia after the Dow's disastrous day. It dropped 660.72 points, equating to 6.31 percent, to close at 9,806.11 points on Thursday, showing the largest one-day loss in history. Turnover was also high at NT$205.33 billion (US$6.57 billion).

Commenting on the sharp fall, Financial Supervisory Commission (FSC) Chairman Wellington Koo (顧立雄) said investor confidence and the local stock market were affected after the US stock market tumbled, but he believes there is no major investor irrationality or disorder.

Taiwan's finance minister Su Jain-rong (蘇建榮) indicated that the national stabilization fund (國安基金) is ready, and was calling for more confidence towards the market based upon its good fundamentals.

Li Fang-kuo (黎方國), chairman of Uni-President Investment Consulting, is cautious on Taiwan's stock market, according to Commercial Times. He is quoted as saying that currently the market is complicated by larger short positions held by foreign institutional investors, as well as by a strong pessimistic sentiment toward the fourth-quarter and 2019 growth expectations as triggered by the expected less-promising companies' earnings reports for September.

Commenting on the market tumble, U.S. President Donald Trump again criticized the Federal Reserve on Wednesday for continuing to raise interest rates despite some recent market turbulence, but he described the slide as a "correction" that the market "has been waiting for a long time."