Taiwanese shares closed down 4.09 percent yesterday on worries over the global financial system after troubled US bank Lehman Brothers announced it intended to file for bankruptcy, dealers said.
The weighted index fell 258.23 points to 6,052.45, off a low of 6,020.70 and a high of 6,202.14, on turnover of NT$72.94 billion (US$2.28 billion). Losers outnumbered gainers by 1,832 to 151 with 267 stocks unchanged.
The market opened sharply lower across the board, and downside extended in particular, in late trade after Lehman Brothers said its board of directors had authorized the bankruptcy filing.
“Fears of a systematic financial crisis from Lehman Brothers’ difficulties prompted investors to dump their holdings,” Concord Securities (康和綜合證券) analyst Allen Lin aid.
“Since it is not clear how the Lehman Brothers’ woes will ripple through the global financial market, wise investors should hold more cash for now,” Lin said.
The financial sector was hit badly as investors worried over exposure to the US investment bank’s debt, dealers said, adding possible additional provisions could hit the sector’s bottom line.
Cathay Financial (國泰金控) fell 6.93 percent to NT$55.10, Chang Hwa Commercial Bank (彰銀) shed 6.90 percent to NT$16.20 and Chinatrust Financial (中信金) fell 6.93 percent to NT$17.05.
Lin suspected that yesterday’s selling largely came from foreign institutional investors, and that without a stable Wall Street, local volatility is expected to continue.
Selling also hurt bellwether electronics. Hon Hai Precision (鴻海精密) fell 6.14 percent to NT$137.50 and MediaTek (聯發科) shed 3.74 percent to NT$321.50.
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