Seeking to address concerns over yesterday's fall of the TAIEX below the psychologically-important 7,000-point mark, Premier Tang Fei (
The TAIEX dropped 143 points yesterday to close at 6,910, its lowest level since August 1999, on turnover of NT$64.6 billion.
Speaking to lawmakers at the Legislative Yuan, Tang said, "The government's economic policy is to prevent declining share prices from disrupting normal industry functioning ... everything else should be left to market mechanisms. The government should not -- nor has the power to -- manipulate the stock market."
Defending the government's economic policy, Tang said, "Taiwan's exports in the first half hit a historical high. The market's continued decline is a consequence of the workweek reduction [scheduled for] next year, the increase in the basic wage and the reduction of foreign labor," Tang said. "It's not because the current economic situation is getting worse."
A number of KMT legislators also asserted that local investors have lost confidence in President Chen Shui-bian's (
According to Finance Minister Shea Jia-dong (
"Economic fundamentals are quite good and the decline is unreasonable," Shea said.
"The Ministry of Finance has been providing benevolent measures to the stock market, both fundamentally and technically. Everyone should have confidence in the stock market."
Recent declines in a variety of important stock markets, including the US, Japan and Hong Kong, have also intensified downward pressure on the local bourse.
Moreover, analysts fear the bottom may be some way off and expect the slide to continue in the near term.
"We expect the TAIEX will continue its decline to around 6,200 points before getting any meaningful support," said Henry Cheng (鄭百亨), of Manulife Fund Direct.
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