Shares fell for the fifth day to a seven-month low yesterday, pressured by high oil prices and concerns over rising tensions on the Korean Peninsula and in the Middle East.
The TAIEX fell 170.23 points, or 2.6 percent, to 6,257.80, its lowest closing level since Dec. 14. The turnover was NT$68.96 billion (US$2.10 billion).
Only 47 stocks rose, while 978 fell and 52 ended flat.
Traders said the concern is that high oil prices will stoke inflation, leading to higher interest rates and thus slower economic growth.
The main index has fallen 424.66 points, or 6.4 percent, in the last five sessions as record oil prices hit global stock markets.
"A spate of panic-selling pulled down the market," said Oliver Fang, a Yuanta Core Pacific Securities (
For those who monitor market charts closely, the breaching of a previous support level at 6,300 points on Monday means that the bourse is likely to consolidate for a while before recovering, he said.
It might be a coincidence that Taipei came under heavier selling on Monday as both the Seoul and Tokyo markets were closed for public holidays, Fang said.
"I am worried that if the market continues to fall, we will see margin calls, forcing investors to sell even more," said Derek Lam, a sales manager at Fubon Securities Corp (
Lam said he expects the index to fall further this week, as investors waiting for corporate earnings from the US will remain on the sidelines.
Media reports that President Chen Shui-bian (陳水扁) may push for a new constitution also sparked fears of rising tensions across the Taiwan Strait, traders said.
Chen reportedly made the promise during a meeting with hardcore independence supporters on Sunday when he sought their backing amid growing calls for his resignation because of alleged family corruption.
Taiwan Semiconductor Man-ufacturing Co (台積電), the world's largest contract chip maker by revenue, fell 2.4 percent to NT$53.80. Rival United Microelectronics Corp (聯電) dropped 2.8 percent to NT$17.60.
Handset makers fell on high inventories, said traders.
BenQ Corp (
Hon Hai Precision Industry Co (
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