Share prices plunged 2.64 percent, with the TAIEX closing below the psychological level of 7,148 points amid concerns that the European debt crisis may weaken the economies of Germany and France.
The weighted index closed down 191.14 points, or 2.64 percent, to end at the day’s low of 7,042.64 on turnover of NT$85.48 billion (US$2.82 billion).
A total of 783 stocks closed up and 3,251 finished down, with 232 remaining unchanged.
All eight main sub-indices on the exchange closed down, with the cement sector suffering the heaviest losses, finishing down 4.06 percent. Foodstuff shares closed down 2.08 percent, plastics and chemicals shed 3.10 percent, while textiles lost 3.02 percent.
Machinery and electronics stocks closed down 2.82 percent, paper and pulp stocks fell 1.83 percent, and the financial sector dropped 1.82 percent.
Marbo Securities Consultant Co (萬寶投顧) president Tsai Ming-chang (蔡明彰) said stocks across Asia fell yesterday, but the Taiwanese bourse suffered the heaviest losses.
The market is facing two major issues — its underestimation of the impact of the eurozone debt crisis and its overestimation of a presidential and legislative election bull run, he said.
The index may drop further to 6,877 points, the lowest in the previous down cycle, he forecast.
Elsewere in Asia, stock prices fell, extending three weeks of losses. Standard & Poor’s 500 Index futures declined and the yen and US dollar gained as US lawmakers approached an impasse on budget cuts, Spain replaced its government and data signaled faltering economic growth from Japan to Singapore.
The MSCI Asia Pacific Index sank 1.2 percent, set for its first five-day slump since August. S&P 500 futures declined 0.8 percent and Treasuries advanced. The yen strengthened against 15 of its 16 major peers, the US dollar traded at US$1.3513 per euro and Malaysia’s ringgit lost 0.4 percent.
The Markit iTraxx Asia index of debt-default risk headed for its highest close in almost six weeks. Copper retreated 0.9 percent.
The US’ deficit-cutting congressional super committee was expected to announce yesterday that it has failed to reach agreement on at least US$1.2 trillion in federal budget savings, a Democratic congressional aide said.
Japan’s exports fell the first time in three months and Singapore said growth would probably slow from 5 percent this year. Spanish prime minister-elect Mariano Rajoy told the country to brace for difficult times after the debt crisis helped sweep his People’s Party to the biggest parliamentary majority in almost 30 years.
“There’s likely to be a continuing impasse and people will focus on the stability of the US politically,” said Tim Schroeders, who helps manage US$1 billion in equities at Pengana Capital Ltd in Melbourne. “People will probably sit on the sidelines and wait for clarity.”
About five shares declined for every two that gained on MSCI’s Asia Pacific Index, which was set for its lowest close since Oct. 7.
Japan’s Nikkei 225 Stock Average retreated 0.3 percent and Hong Kong’s Hang Seng Index sank 1.9 percent.
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