Taiwan Shares Plunge to 2-Month Low
Monday June 5, 5:45 am ET
Taiwan Shares Plunge to 2-Month Low Amid Political Uncertainty
TAIPEI, Taiwan (AP) -- Taiwan shares plunged to a two-month low Monday on growing uncertainty over the president's political future in the wake of a series of corruption scandals.
The Weighted Price Index of the Taiwan Stock Exchange fell 244.37 points, or 3.5 percent, to 6,715.27, the lowest closing level since April 4.
The opposition has asked President Chen Shui-bian to resign following scandals involving his son-in-law, wife and members of his inner circle.
Opposition lawmakers have also threatened to bring a motion to recall Chen. But a recall would need to win the support of two-thirds of lawmakers, a difficult task with the opposition only holding a slim majority of seats.
"Unless Chen resigns, the measures to oust him will lead to a standstill in the government in the next few months," said Shawn Wang, a trader at Fubon Securities.
Monday's selloffs were triggered by heavy stop-loss selling shortly after midday, following a sharp decline in June's futures contracts, traders said.
"Most trading by fund managers is program trading, which sets stop-loss points automatically," said Wang.
Index heavyweight Taiwan Semiconductor Manufacturing fell 3.4 percent to NT$60.4, and rival United Microelectronics ended down 3.5 percent at NT$19.6.
The technology sub-index was down 4 percent Monday, and the financial sub-index fell 3.3 percent.
Smartphone maker High Tech Computer fell sharply early in the morning, when the market was relatively stable, on disappointment over its plans to buy phone vendor Dopod International. It closed down 7 percent to NT$968.0.
High Tech, the world's largest maker of mobile phones that use the Microsoft operating system, said late Sunday it plans to buy Dopod for up to US$150 million (euro120 million).
"The market had expected a more sexy deal, such as a stake buyout from Microsoft or a Japanese mobile phone operator," said Chialin Lu, an analyst at Yuanta Core Pacific Securities.
Traders said they expect the market to fall further after a total of 135 companies fell by the 7 percent daily limit Monday.
Across the board, there were 46 gainers, 781 decliners, and 36 closed unchanged.
