Taiwan's stock market dove steeply yesterday, falling to a new eight-year low after closing on Wednesday on fears that investors would panic in response to the terrorist attacks in the US.
When the market reopened yesterday, the TAIEX dropped 224.44 points, or 5.37 percent, and closed at 3,952.49. Trading volume was NT$17.6 billion, the fourth-lowest since the 921 earthquake that struck two years ago. The market is expected to recover today.
Analysts believe that when US markets reopen, it will likely have significant influence on the performance of Taiwan's market. As of press time, it was not clear whether that would be today or on Monday.
At the opening bell yesterday, more than 90 percent of share prices dropped to their daily downward volatility limit, or 7 percent, later to crawl back slightly. The market closed down 5.37 percent.
One market analyst said the decision to close the markets for one day may have helped to minimize the damage.
"Since the market was closed on Wednesday, it failed to reflect the US incident and the reaction was delayed until Thursday. However, since most European and Asian stock markets started to rebound Thursday, the Taiwan stock market is likely to follow the trend today," said Liu Kai-pin (劉凱平), president of SinoPro Securities Investment Consulting Co (弘利投顧).
Another analyst said that the near-term performance of the TAIEX would closely mirror the US market after it reopened, given that a third of all high-tech products produced by Taiwan are shipped to the US.