Taiwan stock market falls as key laws not ratified

By Sandra Chuang, The China Post

The Taiwan stock market dropped 67.09 points yesterday, partly because lawmakers failed to approve the financial holding company law on Wednesday. The index declined 1.3 percent to close at 5153.35 amid a daily turnover of NT$53.6 billion. The market fell below 5,200 points within minutes and headed lower on investor disappointment at the failure of the Legislature to pass the major finance bill.

“Many investors had bought financial shares over the past few sessions largely on expectations that the proposed finance bill, if passed, would help banks reduce bad loans, said a market observer.”

Stop-loss selling, especially in financial shares, caused the market to plunge. Government-related buying reportedly emerged during the mid-trading session, keeping the market from falling too much.

Some investors attributed the poor market performance to the over-positive comments by Minister of Finance Yen Ching-chang on Wednesday, which claimed that the financial holding company law would be passed during this legislative session. Financial shares, especially those of the banking sector, were hammered the hardest, falling 21.31 points, or 3.1 percent, to close at 666.45 points.

Technology shares were also generally lower on the plunge in U.S. stocks overnight. Taiwan Semiconductor Manufacturing shed 0.5 percent to close at NT$93 while United Microelectronics ended flat at NT$54.