The TAIEX yesterday plunged to a two-year low as the local bourse entered a bear market amid concerns China’s slowdown and currency devaluation would hurt domestic economic fundamentals. A steep drop on Wall Street overnight also lent a blow.
The main trading index ended down 3.02 percent, or 242.89 points, to 7,786.92, dropping below the 10-year moving average and more than 20 percent from a 15-year high on April 27, the threshold for a bear market, analysts said.
“The sharp declines in the TAIEX seen in the past week are the worst since the global financial crisis in 2008,” Masterlink Securities Investment Advisory Corp (元富投顧) president Liu Kun-hsi (劉坤錫) said by telephone.
Photo: Wang Meng-lun, Taipei Times
Liu attributed the downturn to a global economic slowdown and weakening fundamentals in domestic markets.
The nation’s export-focused economy is forecast to grow a mere 0.1 percent this quarter, Liu said, citing a recent projection by the Directorate-General of Budget, Accounting and Statistics.
Turnover totaled NT$101.6 billion (US$3.1 billion), with foreign institutional investors selling a net NT$7.1 billion in local shares, Taiwan Stock Exchange data showed.
Foreign investors pulled a net US$2.5 billion from local shares so far this quarter, the most in Asia after Japan and South Korea, the data showed.
Technology sector bellwethers led the tumble, with the electronics sub-index losing 3.35 percent, deeper than the benchmark index.
Most technology companies have given conservative guidance about business in the second half of this year.
Camera lens maker Largan Precision Co (大立光), chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and smartphone assembler Hon Hai Precision Industry Co (鴻海精密) saw shares drop by 2.46 percent, 3.97 percent and 1.9 percent respectively.
“A downward correction is likely to persist until we see a brighter economic outlook, which might occur when critical statistics are updated later this month or in September,” Liu said.
The margin trading balance, a gauge of risk appetite, fell 0.5 percent, or NT$756 million, to NT$149.52 billion, Taiwan Stock Exchange data showed, as wild volatility raised caution among investors.
The figure stood at NT$162.1 billion on Aug. 3, with the TAIEX standing at 8,524.41, according to the data.
Grim sentiment also weighed on the New Taiwan dollar, which shed NT$0.198 yesterday to close at NT$32.876 against the US dollar in Taipei trading.
The financial sub-index dropped 2.57 percent to 994.7, the first time it has fallen below the 1,000-point mark since May last year.
Only a few listed financial companies did not see drastic declines, such as Taiwan Life Insurance Co (台灣人壽保險), Ta Chong Bank Ltd (TC Bank, 大眾銀行) and EnTie Commercial Bank (安泰銀行), as they are soon to be acquired by larger peers.
Data from the Taiwan Stock Exchange showed that based on yesterday's intraday low of 7813.33 points, about NT$6.23 trillion in market value has vanished since the TAIEX's tumble from 10,014.28 points on April 28.
With the nation's investing public numbering at around 9.43 million, each portfolio is estimated to have sustained losses of NT$200,000 in this month alone.
SCHEDULE: The delegation is due to meet with President Tsai Ing-wen this morning and witness the signing of an MOU on bilateral health cooperation in the afternoon US Secretary of Health and Human Services (HHS) Alex Azar yesterday arrived in Taipei aboard a US government plane at the head of a delegation that is the highest-level visit by a US official since Washington switched diplomatic recognition to China in 1979. Azar’s flight landed at Taipei International Airport (Songshan airport) at 4:48pm, nearly one hour earlier than scheduled, the Ministry of Foreign Affairs said. The apron where it landed is reserved for military aircraft, the Songshan Air Force Base Command said. The members of Azar’s delegation included HHS Assistant Secretary for Preparedness and Response Robert Kadlec, HHS Chief of Staff Brian
CHINESE FIGHTERS: Beijing marked the US Cabinet member’s visit by briefly sending two warplanes across the median line of the Taiwan Strait yesterday morning President Tsai Ing-wen (蔡英文) yesterday met with US Secretary of Health and Human Services Alex Azar in the highest-level official meeting between the two nations since 1979. “It is a true honor to be here to convey a message of strong support and friendship from [US] President [Donald] Trump to Taiwan,” Azar said during the open portion of his courtesy call to the Presidential Office, which was streamed live online before Tsai and Azar held a closed-door meeting. “Taiwan’s response to COVID-19 has been among the most successful in the world, and that is a tribute to the open, transparent,
‘CROSS-STRAIT CONSIDERATIONS’: Groups said that the Ministry of Education’s policies excluded Chinese and students should not be blocked over political issues The Taiwan International Student Movement yesterday said it would protest today outside the Ministry of Education in Taipei against a policy that excludes some Chinese students from returning to Taiwan amid the COVID-19 pandemic. Since June 17, the ministry has allowed foreign students from 19 “low risk” and “medium-low risk” countries and regions to enter Taiwan. On July 22, it announced that it was relaxing restrictions to include students from all countries and regions who are graduating this semester and on Wednesday it further expanded entry to students enrolled in degree programs. A letter sent by the ministry on Wednesday to universities did
PARTNERSHIP AND LEARNING: A Princeton University health policy researcher said that the nation would be a ‘treasure trove’ of information for the US health chief US Secretary of Health and Human Services Alex Azar on Friday said he wants to learn about Taiwan’s “incredibly effective” response to COVID-19, even though the nation did things that the US has fumbled, such as having a unified strategy and citizens willing to wear masks. Azar leads a US delegation arriving today for a three-day visit to Taiwan. They are to meet with President Tsai Ing-wen (蔡英文) and health system leaders, and Azar is to give a speech to public health graduates. “The message of this trip is about Taiwan,” Azar said in an interview, deflecting a question about China.
RSS