Shares on the Taiwan Stock Exchange yesterday took a dive, apparently affected by declines in the major Asian stock markets of Hong Kong, Japan, South Korea and China, dealers said, attributing the regional fall to concern among investors over crude oil price drops and the global economic slowdown.
The TAIEX closed down 155.76 points, or 1.98 percent, at 7,699.12, after moving between 7,835.17 and 7,687.6, on turnover of NT$88.26 billion (US$2.61 billion).
Weighted stocks were mostly weak, with the bellwether electronics subindex closing down by 2.38 percent and the financial sector moving lower by 2.28 percent.
News that Chang Yung-fa (張榮發), founder of shipping giant Evergreen Group (長榮集團), died yesterday at the age of 90 caused shares in Evergreen Marine Corp (長榮海運) and EVA Airways Corp (長榮航空) to fall, with Evergreen Marine losing 3.03 percent to close at NT$11.2 and EVA Airways dipping 1.93 percent to end at NT$17.8 percent.
The MSCI Asia Pacific Index sank 2.8 percent to 116.51 as of 4:01pm in Hong Kong, heading for its biggest decline since September last year. Energy shares led losses across the region as oil extended its decline from the lowest close in more than 12 years before weekly US government data forecast to show crude stockpiles expanded, exacerbating a global glut.
The 14-day relative strength index for the regional stock gauge, a measure of momentum, traded below 30, a level some traders take as an indication shares will rise.
“We’ll continue to see a tug of war between nervous sentiment and technical indicators showing that falls have gone too far,” SMBC Nikko Securities Inc general manager Chihiro Ohta said in Tokyo. “At the root of the selling we’ve seen this year has been the imbalance of oil supply and demand, so until the oil price moves calm down, the stock market will struggle.”
Concern over China’s ability to manage a transition to more sustainable growth has driven down global equities this year. The IMF cut its world growth outlook, highlighting weaker prospects for commodity-producing nations and risks tied to the US Federal Reserve’s exit from ultra-low interest rates.
Oil markets could “drown in oversupply,” sending prices even lower as demand growth slows and Iran boosts exports, the International Energy Agency said.
Japan’s TOPIX sank 3.7 percent to 1,338.97 at the close in Tokyo, taking its loss since a high on Aug. 10 last year to 21 percent. The Nikkei 225 Stock Average fell 3.7 percent to 16,416.19, also down by 21 percent from its recent peak on June 24 last year.
Bank of Japan officials have expressed increasing disappointment at subdued annual wage talks, people familiar with the discussions said, making next week’s monetary policy decision a closer call.
The Nikkei 225 last entered a bear market in June 2013, after plunging 20 percent in less than a month. The gauge soon rebounded, rallying 31 percent from its low on June 13, 2013, through the end of that year.
Chinese stocks in Hong Kong tumbled to the lowest level since the depths of the global financial crisis, as a slide in the Hong Kong dollar spurred concerns over capital outflows.
The Hang Seng China Enterprises Index plunged by as much as 5.5 percent before paring losses to 4.3 percent at the close in Hong Kong.
The benchmark Hang Seng Index dropped 3.8 percent to the lowest since July 2012. The Shanghai Composite Index lost 1 percent.
Additional reporting by Bloomberg
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