Taiex plunges 168.84 points on weak U.S. market
The weighted share price of the Taiwan Stock Exchange yesterday plunged 169.84 points to close at 8047.74, in line with the lingering bearish sentiment of the U.S. stock market, according to market sources.
Affected by the weak performance of the U.S. stock market, the local bourse opened low at 8075.26, and trended downward during most of the trading session amid strong wait-and-see atmosphere in the market.
All the eight major categories of shares suffered drops, with textile stocks posting the largest decline of 3.8 percent, followed by a dip of 3 percent for cement shares, 2.6 percent, foodstuffs issues, 2.1 percent for plastics stocks, 2 percent for electrical and electronics issues, 2 percent for financial shares, 1.5 percent for construction stocks, and 1.1 percent for paper-making shares.
Amid the bearish sentiment, as many as 2,040 listed shares declined, 311 issues rallied and the remaining 309 stocks ended unchanged.
Market analysts said that with inflationary pressure fueled by the lingering high international oil prices, the global economic prospects remain lackluster, making it difficult for international stock markets to perform well.
They said investors in the local bourse have been taking a wait-and-see attitude toward whether to step in, the daily turnover so far this week has fallen under the level of NT$90 billion, reaching only NT$82.543 billion on Thursday.
Nevertheless, the analysts foresaw some favorable factors that might prevent the local bourse from declining further. One major factor is that oil producing countries such as Saudi Arabia have issued statements that as the international oil prices are too high, they would move to increase oil production to bring down the prices. Accordingly, room is limited for the international oil prices to grow further.
Another factor is that the listed firms are expected to release a considerable amount of cash bonuses to their shareholders, which, in turn, may help jack up daily stock turnover of the local bourse.
Meanwhile, foreign institutional investors yesterday recorded an over-selling position of NT$18.29 billion amid the strong selling sentiment of the local bourse.
In fact, since Ma Ying-jeou was sworn in Taiwan’s new president on May 20, the weighted share price index of the local bourse has plunged a total of over 1,000 points, and the average daily turnover has fallen under NT$90 billion.
The major reason behind the market fall rests with the fact that the U.S. stock markets have remained weak, which has offset the effect of some encouraging measures raised by the new Cabinet.
Tags: inflation, Share, stock-market, Textile