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TAIEX dives to new lows, drops below 5000-level
STAFF WRITER, WITH AGENCIES
Tuesday, May 22, 2001, Page 1
The nation's main stock index plunged 3 percent yesterday -- breaking the psychologically important 5,000 level -- after the New Taiwan dollar dropped to lows not seen in over two years.
The TAIEX tumbled 153.06 points to 4,958.61. Yesterday's close was the lowest level the index has reached since Jan. 3.
Also weighing on sentiment were changes on Saturday in global stock indices drawn up by Morgan Stanley Capital International.
Investors fear that this will mean less foreign money flowing into the market from global fund managers, who often mimic the indices in their portfolios.
Over the weekend, Taiwan Research Institute, a private think-tank, suggested the government should allow the New Taiwan dollar to drop to NT$40 against the greenback to boost exports.
That sent the NT dollar reeling as foreign equity investors and importers scrambled to buy US dollars, pushing the New Taiwan dollar down to NT$33.456 -- a 1 percent drop from Friday's close of NT$32.94.
"The worse was that the suggestion, which dragged down the local currency markedly, has shattered the already fragile market confidence," said Jessica Teng at Grand Cathay Securities.
Turnover on the TAIEX yesterday was NT$40.94 billion, down from Friday's NT$46.5 billion.
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