Tue, May 30, 2006 - Page 12 News List

Confidence in stock markets suffers big drop

By Amber Chung  /  STAFF REPORTER

Consumer confidence in stock investment plummeted this month because of weakened global and local bourses, according to a survey released by National Central University yesterday.

As one of the six sub-indices used to gauge the consumer confidence index (CCI), public confidence in stock performance for the coming six months fell by 11.70 percentage points, the largest plunge among all sub-indices, to 72.80 points this month, the university's Research Center for Taiwan Economic Development said in the report.

The center attributed the fall to rising crude oil prices worldwide, lackluster US and Asian stock markets, as well as an unstable international economic environment.

The TAIEX closed down 0.01 percent to 6,878.88 points yesterday, which represented a 7.96 percent drop in the benchmark index from a five-year high of 7,474.05 on May 8, according to Taiwan Stock Exchange data.

With four sub-indices down and two up, the CCI continued to weaken by 1.77 percentage points to 69.01 this month, the report said.

The monthly survey polled 2,688 people aged over 20 nationwide between May 18 and 20.

The index gauges public expectations on stock performance, household finances, the purchase of durable goods, job opportunities, consumer price fluctuations and the economic outlook over the succeeding six months.

A CCI figure of less than 100 points indicates that the public is pessimistic on the six-month outlook, the center said.

Besides stock performance, consumer confidence in household finances this month decreased by 0.45 percentage points to 55.80, the lowest level since 2001, when the CCI survey started, according to the center.

The public's expectations on employment and the economic outlook, meanwhile, decreased by 0.35 percentage points and 0.15 percentage points to 74.90 and 53.55 points respectively this month, the survey found.

Consumer confidence in commodity prices, however, rose to 41.45 points this month, after a record low of 40 points last month, followed by confidence in the purchase of durable goods, which edged up by 0.6 percentage points to 115.55 in the same period, the survey said.

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