The TAIEX yesterday dropped to its lowest level in 11 months, falling 3.5 percent to close below the psychologically important 4,000-point level at 3,924.04 points.
"The economic fundamentals still don't look good, which led to foreign investors' dumping local stocks, including blue chip shares of Taiwan Semiconductor Manu-facturing Co (
Huang added that orders for the two chipmakers won't pick up in a near term.
According to the Stock Exchange Co, overseas investors, who own about 17 percent of Taiwan stocks by market value, yesterday sold more shares than they bought for a seventh day, selling a net NT$2 billion (US$57.4 million).
Huang estimated that overseas investors have dumped some NT$20 to NT$30 billion in total shares in the past nine months, adding that the selling pressure may continue until the end of the month.
He also attributed overseas investors' sales to the sliding US stock market and the port shutdown on the US West Coast.
Foreign investors, who lack confidence in the economic recovery, are apparently eager to liquidate their investments in Asian countries, whose losses are minor compared to the US stock market, Huang said.
Meanwhile, local investment trusts yesterday sold a net NT$662.3 million of shares while proprietary traders sold a net NT$592.4 million, the stock exchange said in a statement.
Despite yesterday's stock price decline, Finance Minister Lee Yung-san (李庸三) told legislators that the government does not have any plans to activate the NT$500 billion National Stabilization Fund (國安基金) to prop up the TAIEX.
"The government is aware of foreign investors' heavy selling activities [in the stock market] and has asked the Securities and Future Commission (證期會) to watch closely" Lee said yesterday afternoon at the Legislative Yuan.
He said that the fund can only be activated in times of non-economic crises, such as in times of heightened military tension with China.
Yesterday's stock decline was the result of the global economic slowdown, Lee said.
In terms of individual stock performance, Mosel Vitelic Inc (
UMC yesterday fell NT$1.3, or 6.1 percent to NT$20, its lowest since Oct. 30, 1998. Silicon Integrated System Corp (
Ta Chong Bank Ltd (
In addition, Fubon Financial Holding Co (富邦金控) fell NT$0.60, or 2 percent, to NT$29 while the Na Ya Plastic Corp (南亞塑膠) fell NT$0.50, or 1.9 percent, to NT$25.6.
Following the stock decline, the NT dollar yesterday also depreciated to close at 35.055 against the greenback. Yesterday's turnover was US$546 million compared with Friday's US$260 million.
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