Consumer confidence weakens on stock market crash

Taipei, July 27 (CNA) Consumer confidence in Taiwan weakened in July with consumer sentiment spooked by an almost 3,000-point plunge on the local stock market in one single session earlier this month, a survey released by National Central University (NCU) showed Monday.

Citing a survey conducted July 18-21, NCU said the consumer confidence index (CCI) fell 0.47 points from a month earlier to 64.58 in July.

All six of the constituent factors in the July CCI moved lower, according to the university.

The CCI measures sentiment over the next six months across six factors: consumer prices, the domestic economic climate, the stock market, durable goods purchases, employment prospects and family finances.

The subindex on the stock market suffered the steepest decline in July, moving lower by 1.82 from a month earlier to 28.08, the survey found.

The Taiex, the Taiwan Stock Exchange's benchmark index, tumbled 2,953.71 points or 6.47 percent on July 17, the steepest one-session drop in history amid worries over an AI bubble and escalating inflation in the United States caused by tensions in the Middle East.

Speaking with reporters, Dachrahn Wu (吳大任), director of the NCU Research Center for Taiwan Economic Development, said the plunge on the Taiex badly hurt investor confidence.

Over the past two years, Wu said, Taiwan's economy has been largely boosted by AI development with the Taiex rising accordingly, so when the stock market tumbled, faith in the economy and consumer confidence were battered.

Among other factors on the July CCI, the subindexes on the domestic economic climate, family finances, employment, durable goods purchases and consumer prices also moved lower by 0.34, 0.28, 0.27, 0.12 and 0.01, respectively, from a month earlier to 80.53, 77.42, 72.19, 93.43 and 35.82 in July, the survey showed.

Also in July, the home-buying index compiled by NCU and Taiwan Realty fell 0.22 points month-on-month but remained above the 90 point mark at 90.13.

As the stock market experienced increasing volatility, it is possible some investors could move their funds to the housing market, Wu said, adding that home buying interest has shown some signs of recovering since June.

At the same time, the recovery in home buying also came as some consumers rushed to jump into the market before the government's preferential residential housing mortgage program expires at the end of July, Wu said.

The university's July CCI survey collected 3,308 valid responses from Taiwanese consumers aged 20 and older. It has a 95 percent confidence level with a margin of error of plus or minus 2.0 percentage points.