Taiwan stocks slid as the government restored the daily drop limit to 7 percent, enabling investors to dump shares. The nation's leading chipmakers Taiwan Semiconductor Manufacturing Co (TSMC,
The TAIEX dropped 58.34, or 1.6 percent, to 3,533.51, after earlier falling to its lowest since Jan. 30, 1993. Yesterday 166 stocks fell to 52-week lows.
The Ministry of Finance yesterday restored the 7 percent daily limit by which stocks may rise or fall. It halved the limit last week in the wake of the plunge in global equity markets following the terrorist attacks and the damage brought by Typhoon Nari.
"There are still a lot of TSMC shares to be sold, more than NT$100 million worth," said Chang Wei-min, head of research at ING Barings Securities Ltd in Taiwan. "I think there will be another two or three days of selling of TSMC and UMC shares before there is a recovery in those stocks."
Chang said government funds bought shares yesterday in an effort to stem declines. The government has a NT$500 billion (US$14.5 billion) fund to support the stock market. Fund managers however do not comment on their activities.
The TAIEX has dropped 15 percent since Sept. 11 when terrorists attacked the US, losing more then US$30 billion of its market value.
Stocks also fell after the government said Taiwan's jobless rate climbed to a record in August, threatening to deepen an expected recession.
Unemployment rose to 5.17 percent from 4.92 percent in July, the government said. That was the highest since the government began compiling figures in 1978 and the 12th increase.
Within the key stock index, 224 stocks fell and 221 rose. The total value of trade was NT$43.4 billion (US$1.3 billion), up from NT$13 billion last Friday.
Chipmakers declined. TSMC, the largest contract chipmaker, fell NT$3.50, or 6.9 percent, to NT$47.50. a 52-week low. UMC, the second-largest contract chipmaker, fell NT$2.10, or 7 percent, to NT$28.10, a 52-week low. Winbond Electronics Corp (華邦電子) fell NT$0.55, or 4.9 percent, to NT$10.70, after earlier falling to a 52-week low of NT$10.50.
Airlines fell after underwriters decided to impose a US$50 million-per-plane cap on damages caused by aircraft brought down by acts of war. Airlines have said they can't keep flying unless they fill the gap left by the new insurance rules, which are to take effect today.
China Airlines Co (
Insurers slipped on concern claims for damages and personal injury following Typhoon Nari may increase, depressing earnings.
Cathay Life Insurance Co (國泰人壽), the largest insurer in Taiwan as measured by market value, fell NT$1.40, or 3.9 percent, to NT$34.40. Taiwan Life Insurance Co (台灣人壽), the third-biggest insurer by market value, fell NT$1.80, or 6.8 percent, to NT$24.60.
Compal Electronics Inc (
Compeq Manufacturing Co (
Compeq Manufacturing Co (
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