The stock market tumbled to its lowest level in almost three months, puzzling market watchers as to the reason for the 3.7 percent slide. All major news agencies -- quoting dealers and analysts -- cited different reasons for the 215.13 point drop to 5,574.71.
About 33 shares fell for each one that rose. The total value of trade was NT$59.4 billion (US$1.7 billion), less than half the six-month daily average of NT$123.5 billion.
According to Bloomberg news in Taipei, the drop was triggered by a report that stated the stock exchange may halt margin trading in stocks whose net worth last year fell below their nominal value.
"Canceling margin trading on those stocks will put lots of selling pressure on those stocks as investors get out," said Mahavira Chang, who helps manage NT$300 million (US$8.7 million) in stocks at Truswell Securities Investment Trust Co (
US news agency Associated Press said Taiwan shares ended sharply lower yesterday as fragile market sentiment was further weakened amid various reports about upcoming military exercises in China.
Analysts said reports by Hong Kong media over the weekend that China will soon start military drills along coasts facing Taiwan also weighed on sentiment, AP reported.
The French news service Agence France-Presse (AFP) interpreted the decline differently, saying that fresh worries over another terrorist attack on the US had spurred the plunge.
Meanwhile the government mouthpiece -- the Central News Agency (CNA) -- said the ongoing "persistent drought" was to blame for the market's fall.
But AFP did find some common ground with the Central News Agency, saying that despite anticipation of government support as President Chen Shui-bian (陳水扁) celebrates his second year in office, some factors proved to be unfavorable to the stock market.
"Investors who built portfolios earlier dumped holdings on disappointment that there was no apparent government support" when Chen celebrated his second anniversary of inauguration, a dealer said in the AFP report.
The index fell 14 percent in the past month on concern a US recovery may lag expectations and as a local water shortage boosts the cost of providing water to chipmakers and other industries. The US is Taiwan's second-largest trading partner.
The market paid little attention to a government report last Friday that Taiwan's economy grew 0.89 percent in the first quarter, following three consecutive quarterly contractions.
"Investors cashed out of the bourse regardless of the economic growth reported in the first quarter and the upward revision for the whole year as those data only showed mild rather than any major recovery," the dealer said.
Oliver Fang, a fund manager at National Securities Co (
"Market sentiment is fragile," said Justine Lin at MasterLink Securities Co (
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure