The nation’s consumer confidence index this month fell to 79.48, the lowest in 22 months, with the sub-index on stock investment falling by the fastest pace on record after the US raised tariffs on Chinese goods earlier this month, a survey released yesterday by National Central University showed.
The index shed 5.85 points as the nation was caught in a trade spat between the US and China, which together account for more than half of Taiwan’s outbound shipments, the survey by the university’s Research Center for Taiwan Economic Development found.
The sub-index on stock investment plunged 37 percent from 96.4 to 60.6, suggesting that people believe it is ill-advised to invest in local shares over the next six months, the survey showed.
Scores of less than 100 suggest pessimism, while values above the threshold indicate optimism.
The bleak sentiment came as foreign funds pull out of Taiwan, pushing the TAIEX down 5.8 percent so far this month, Taiwan Stock Exchange data showed.
Foreign institutional players yesterday cut NT$46.82 billion (US$1.49 billion) net worth of local shares on concern that local firms with deep exposure to China’s electronics supply chain might see their earnings ability affected.
“The tariff hikes [on May 10] shattered that expectations that the US and China would resolve their differences at the negotiation table,” center director Dachrahn Wu (吳大任) said.
Beijing has retaliated and the two sides have threatened to take more drastic measures next month, if necessary, Wu said, adding that the hawkish rhetoric has unnerved investors and triggered panic selling.
A negative wealth effect weighed on the sub-index on household income in the coming six months, pushing it down 0.2 to 89.8, the survey found.
The sub-index on the job market fell 0.6 to 101 and the sub-index on durable goods consumption lost 0.4 to 91.7, the survey showed.
The sub-index on the economic outlook over the next six months held steady at 85.3, as people have neutral views about the economy, the poll found.
The sub-index on inflation expectation bucked the trend, inching up 0.4 to 48.6, backed by stabilizing oil and raw material prices, it said.
The poll, which was commissioned by the government, surveyed 2,718 adults by telephone between Sunday last week and Thursday, and has a 2 percent error margin.
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