Tue, Oct 07, 2008 - Page 11 News List

Taiwan weighted index closes down at four-year low

AFP , TAIPEI

Taiwanese shares closed down 4.12 percent yesterday at a four-year low amid fears of a global economic meltdown resulting from the current financial woes, dealers said.

The weighted index fell 236.53 points to 5,505.70, off a high of 5,590.52, on turnover of NT$60.21 billion (US$1.87 billion).

The previous low of 5,427.75 was on Aug. 18, 2004.

The market opened sharply lower after Wall Street’s fall on Friday despite the US Congress’ approval of a massive financial rescue package, dealers said.

The downside extended until the end of the session as investors were afraid that the ailing global financial system would trigger liquidity problems and worsen the economic fundamentals, they said.

“The approval of the financial rescue plan failed to bolster market confidence. Pessimism towards the global economy is running deeper,” Yuanta Securities Investment Consulting (元大投顧) analyst Young Wang said.

Financial firms were the biggest victims of the sell-off as investors worried that an escalating global credit crunch would impact banks’ operations, dealers said.

Investors also worried about banks’ exposure to the liabilities of the US financial sector, they said. Fubon Financial (富邦金控) shed 6.98 percent to NT$20.65 and Cathay Financial (國泰金控) fell 6.94 percent to NT$39.55.

Chinatrust Financial (中信金控) lost 6.75 percent to NT$15.20 and Mega Financial fell (兆豐金控) 6.93 percent to NT$12.75.

Wang said the selling came largely from foreign institutional investors who need funds to meet redemption demand back in the US amid Wall Street’s turmoil.

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