Taiwanese shares closed down 2.28 percent yesterday at their lowest point in five years as investors shrugged off a Wall Street rally overnight but remained concerned over a global financial meltdown, dealers said.
The weighted index fell 115.57 points to 4,960.40, off a low of 4,924.73 and a high of 5,024.43, on turnover of NT$55.33 billion (US$1.70 billion). It was the lowest close since the index hit 4,872.15 on June 30, 2003.
The market opened sharply lower despite the Wall Street gains as financial heavyweights encountered stiffer resistance on fears that their bottom lines would be hurt by financial woes in the US and Europe, dealers said.
Selling, which largely focused on large cap stocks, extended until the end of the trading session, pushing the index below 5,000 points, they said.
“The breach of the 5,000 key point level was very psychological to investors. After the downside, worries about further declines are running deeper,” Mega Securities (兆豐證券) analyst Alex Huang (黃國偉) said.
Huang said he believed foreign institutional investors would continue to sell on expectations of further turmoil ahead on Wall Street.
“I do not think the foreign investors’ sell-off will simply stop here. Amid tight liquidity, they are likely to continue to cut their positions,” Huang said.
The local bourse had seemed resilient over the past few sessions compared to the heavy losses suffered by its overseas counterparts, Huang said.
“However, the resilience was artificial as the government has narrowed down the daily downside limit to 3.5 percent from the previous 7 percent. The worst is not over yet,” Huang said.
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