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Nari closes markets as US reopens

"The TAIEX's performance will be closely related to the performance of the US market over the next few trading days, especially the NASDAQ."

Neal Stovicek, an analyst at National Securities

Taiwan's stock, futures and currency markets in Taipei will remain closed for a second day today as Typhoon Nari stalls over Taiwan, television news reported yesterday.

If the nation's bourses open as scheduled tomorrow, they are likely to face further declines based on downward movements in regional markets yesterday.

The TAIEX plummeted 12.26 percent, or 527.54 points, last week, closing at 3,774.62 last Friday. This was the market's lowest level in eight years. Analysts said the TAIEX is likely to test the 3,400-point level.

Analysts say the TAIEX will sink lower if the US market, which reopened yesterday, declines this week. If the US market stabilizes, they said, the TAIEX could rebound.

"The TAIEX's performance will be closely related to the performance of the US market over the next few trading days, especially the NASDAQ," said Neal Stovicek, an analyst at National Securities (建弘證券).

Another market watcher said shares may test new lows.

"In the short-term, the TAIEX is likely to test the 3,400-point level. If the US market drops more than 10 percent in its first few days of trading, the TAIEX could test the 3,000-point level. Uncertainty in the US economy and the possibility of an escalating conflict between the US and terrorists in the Middle East could drag the market down further," said Liu Kai-pin (劉凱平), president of SinoPro Securities Investment Consulting (弘利投顧).

Asian stock markets performed poorly yesterday in anticipation that US shares will plunge when trading resumes in New York. Japan's Nikkei 225 stock average fell 5 percent to an 18-year low. South Korea's KOPSI lost 2.8 percent and Singapore's Strait Times Index dropped 5.2 percent. Some analysts expect US share markets to plummet 5 percent to 10 percent in the near term.

The New York Stock Exchange, situated three blocks from the World Trade Center plaza, has been closed since last Tuesday's terrorist attack. The absence of the world's biggest stock market has cast a question mark over the global economy.

Insurance, airline and banking shares in the US are expected to see big losses.
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