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Taiwan shares sink 6% in mid-morning trading

2018/10/11 12:27:53

Taipei, Oct. 11 (CNA) Taiwan shares plunged below the 10,000-point mark on Thursday, a day after the market was closed for the National Day holiday, falling more than 600 points in the mid-morning trading session in the wake of falling U.S. markets overnight, where the Dow Jones Industrial Average fell 831 points, its worst loss in eight months.

The benchmark weighted index on the Taiwan Stock Exchange (TWSE), or the Taiex, opened down 194.79 points at 10,272.04 before tumbling more than 500 points to below the 10,000 point mark within three minutes and continuing the downtrend, falling 662.53 points or 6.33 percent as of 11:25 a.m.

The plunge came as the Ministry of Finance (MOF) announced the stabilization fund committee could meet later Thursday to decide whether the National Stabilization Fund should enter the local equity market to prop up share prices at a time of volatility in global financial markets.

The local stock market has been under pressure amid Wall Street weakness, a weaker Chinese yuan and the local currency falling against the U.S. dollar, which has resulted in foreign exchange losses for companies listed on the local bourse.

Taiwan posted the steepest decline among markets in the Asian region last week when the Taiex fell 489.22 points, or 4.44 percent, to close at 10,517.12 Friday.

In the last session on Tuesday, the major index closed up 10.90 points, or 0.10 percent, at 10,466.83, on a technical rebound after moving between 10,428.97 and 10,503.10, on turnover of NT$120.63 billion (US$3.90 billion).

In response to the deep dive in the mid-morning trading session, Deputy Finance Minister Juan Ching-hwa (阮清華), executive secretary of the stabilization fund, said at a legislative session Thursday that local shares falling below the 10,000-point mark is not a key point of consideration when deciding whether the fund should intervene in the market, but market disorder caused by irrationality among investors and a confidence crunch would be factors prompting the fund committee to authorize the stabilization fund to intervene in the market.

Meanwhile, Vice Premier Shih Jun-ji (施俊吉) called on investors not to panic, saying that local economic fundamentals remain sound, the U.S. economy is powering ahead and the Taiex will soon bounce back over the 10,000-point mark.

Since the Taiex hit 10,007.84 points on May 23, 2017, the main board has remained above the 10,000-point level for nearly 17 months, the longest run above that level in the history of the local equity market.

(By Pan Chih-yi, Pan Tzu-yu, Tien Yu-pin and Evelyn Kao)
Enditem/AW