Shares in Taiwan closed in negative territory on the first trading day of the new year, pulled down by a fall on Wall Street at the end of last week and cautious sentiment ahead of the Jan. 16 presidential and legislative elections, dealers said.
The market was also caught in a downward spiral seen around Asia, triggered by a heavy sell-off in China that forced the suspension of trading in Shanghai.
The TAIEX closed down 223.80 points, or 2.68 percent, at 8,114.26, after moving between 8,109.09 and 8,326.33. Turnover totaled a relatively low NT$76 billion (US$2.29 billion) during the session.
It was the biggest fall on the first trading day of a new year on the Taiwan Stock Exchange since 1999.
Hua Nan Securities Co (華南永昌投顧) chairman David Chu (儲祥生) said the sell-off followed a 1.02 percent drop in the Dow Jones Industrial Average in the US on Thursday last week.
Many investors are staying on the sidelines ahead of the elections, given the uncertainties in the market, he said.
The abolishment of the capital gains tax on profits from trading stocks, which was passed by the Legislative Yuan in November last year and took effect yesterday, led to heavy selling of several stocks that went public last year.
OBI Pharma Inc (浩鼎), the most expensive stock in the biotech sector, which rose from its listing price of NT$310 per share in March last year to its recent level of more than NT$600, closed 7.2 percent lower at NT$608.
Financial stocks dropped 3.52 percent yesterday.
In China, the worst-ever start to a year triggered a trading halt in more than US$7 trillion of equities, futures and options, putting the nation’s new market circuit breakers to the test on their first day.
Trading was halted at about 1:34pm after the CSI 300 Index dropped 7 percent. An earlier 15-minute suspension at the 5 percent level failed to stop the retreat, with shares extending losses as soon as the market reopened.
Traders said the halts took effect as anticipated without any major technical problems.
The world’s second-largest stock market began the year on a down note after data showed manufacturing contracted for a fifth straight month and investors anticipated the end of a ban on share sales by major stakeholders at the end of this week.
Under the circuit breaker rules finalized last month, a move of 5 percent in the CSI 300 triggers a 15-minute halt for stocks, options and index futures, while a move of 7 percent closes the market for the rest of the day.
The CSI 300 fell as much as 7.02 percent before trading was suspended. The Shanghai Composite Index fell 6.9 percent.
The sell-off rippled throughout the region. Japan’s Nikkei 225 closed down 3.1 percent, Hong Kong’s Hang Seng Index finished 2.68 percent lower, South Korea’s KOSPI closed 2.17 percent lower and Singapore’s Straits Times Index finished down 1.47 percent.
CLOSE ENCOUNTERS: Several of the PLA fighter jets that crossed the median line of the Strait came within 68km of Hsinchu, drawing warnings from Taiwan, the ministry said At least 18 Chinese military aircraft yesterday flew into the nation’s air defense identification zone (ADIZ) on the second day of a US delegation’s visit, the Ministry of National Defense said, adding that the military responded by deploying an air defense missile system to monitor their activities. A delegation led by US Undersecretary of State for Economic Growth, Energy and the Environment Keith Krach on Thursday started a three-day visit to Taiwan. The ministry from Thursday started publicizing the actions of the Chinese People’s Liberation Army (PLA) in Taiwan’s ADIZ on its Web site and Twitter. According to ministry reports, 18 PLA aircraft
TWO CASES: The five allegedly conspired with conglomerates, threatening the nation’s governance and subverting the rules of ethical conduct, a deputy chief prosecutor said Taipei prosecutors yesterday charged three legislators and one former lawmaker with contravening the Anti-Corruption Act (貪污治罪條例) in a case linked to former Pacific Distribution Investment Co (太平洋流通) chairman Lee Heng-lung’s (李恆隆) battle with the Far Eastern Group (遠東集團) over ownership of the Pacific SOGO Department Store (太平洋崇光百貨) chain, while independent Legislator Chao Cheng-yu (趙正宇) was indicted in a separate case involving two funeral services companies and a plot of land in a national park. Chinese Nationalist Party (KMT) legislators Chen Chao-ming (陳超明) and Sufin Siluko (廖國棟), Democratic Progressive Party (DPP) Legislator Su Chen-ching (蘇震清) and former New Power Party legislator
PENGHU INSPECTION: Taiwan cannot let its enemies strut around in its airspace, Tsai said, one day after a Chinese spokesman denied a median line exists in the Taiwan Strait Following China’s assertion on Monday that there is no “median line” in the Taiwan Strait, President Tsai Ing-wen (蔡英文) yesterday pledged to defend the nation’s airspace during a visit to an air force base in Penghu, saying that Taiwan cannot allow others to flex their military muscle in its territorial airspace. Tsai praised the “heroic performance” of the pilots of the Indigenous Defense Fighters who have been intercepting Chinese People’s Liberation Army Air Force planes in recent days. “I have a lot of confidence in you. As soldiers of the Republic of China [ROC], how could we let enemies strut
Swedish Member of Parliament Hampus Hagman is pushing for changing the name of the nation’s trade office in Taipei to signal improved relations with “Asia’s perhaps foremost democracy.” Hagman on Wednesday last week proposed renaming the Swedish Trade and Invest Council to “Sweden’s Office in Taipei,” following similar changes by other nations. The Swedish Trade and Invest Council, part of Business Sweden, is owned by the Swedish government and Swedish industry. Taiwan and Sweden share important values such as respect for democracy, human rights, the rule of law and freedom of speech, Hagman said in the motion, adding that the two nations