Taiwan’s stocks plummeted yesterday to a five-month low following a 3 percent plunge on Wall Street overnight and a more than 2 percent decline in most Asian markets amid rising concerns about inflation and commodity prices.
The slide in the benchmark TAIEX also came one day after the nation’s central bank announced it would raise its key interest rates by 0.125 percentage points, effective yesterday, and increase the reserve ratios for domestic banks from Monday to fight inflation and rein in excess liquidity.
The TAIEX dropped 263.04 points, or 3.37 percent, to close at 7,548.76 — its lowest since Jan. 31.
Elsewhere in Asia, Shanghai’s benchmark index plunged 5.3 percent to a 16-month low and India’s SENSEX fell 4.3 percent to a 13-month low. Japanese stocks dropped for the seventh consecutive day to a two-month low, while markets in Hong Kong, South Korea, New Zealand and the Philippines fell around 2 percent.
“The way the global market is going down, it is likely to drag the Taiwanese market along with it. That’s the threat of financial contagion,” Lim Say Boon (林哲文), chief investment strategist of Standard Chartered Bank’s wealth management group, told a media briefing in Taipei yesterday.
The TAIEX is likely to see another nosedive “very soon,” challenging its 200-day moving average of 7,200 points, Lim said, adding that it would likely “bounce back.”
Investors may “be tempted to bargain hunt” for emerging real value, although the TAIEX will remain volatile as global stock markets fluctuate, he said.
Worries about inflation intensified after crude oil prices surged above US$141 for the first time in Asian trading yesterday.
But Lim said that, compared with its Asian peers, the nation was doing a good job of keeping inflation under 4 percent.
Standard Chartered forecast inflation of 23 percent in Vietnam this year, 11 percent in Indonesia, between 6 percent and 7 percent in China and Singapore and 8 percent to 9 percent in India.
Sentiment may become more bearish as the US credit crisis is expected to continue, Lim said.
“This is by no means over,” he said, adding that another US$55 billion credit loss would probably surface, citing the IMF’s estimate that the total US write-down in the crisis would be US$945 billion.
Standard Chartered forecast that the US economy would see just 1.2 percent growth this year, which will have a ripple effect in Asia.
Lim suggested that investors diversify their portfolios to hedge risks by buying gold, commodities and oil-related financial products.
Additional reporting by AFP
Also see: Geopolitical unrest, weak dollar drive oil prices to record
Also see: CEPD sounds yellow-blue alarm
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique