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.
Photo: AFP
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.
The Ministry of Transportation and Communications yesterday inaugurated the Danjiang Bridge across the Tamsui River in New Taipei City, saying that the structure would be an architectural icon and traffic artery for Taiwan. Feted as a major engineering achievement, the Danjiang Bridge is 920m long, 211m tall at the top of its pylon, and is the longest single-pylon asymmetric cable-stayed bridge in the world, the government’s Web site for the structure said. It was designed by late Iraqi-British architect Zaha Hadid. The structure, with a maximum deck of 70m, accommodates road and light rail traffic, and affords a 200m navigation channel for boats,
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