Taiwan stock market down 3.2% on gloomy GDP growth report

Sandra Chuang, The China Post

The Taiwan stock market yesterday dropped to its lowest level since August, 1995, falling 147.86 points, or 3.2 percent, to close at 4,485.68 on a daily turnover of NT$59.3 billion. The index surged 81.79 points at the opening on the back of the strong rally on the U.S. stock market overnight. However, the gains were fleeing as investors decided to take advantage of the gain to cut losses amid gloomy economic prospects. The market remained in negative territory for the rest of the session.

Dealers said that the market was initially boosted by gains in technology shares in the wake of the strong upturn on the Nasdaq overnight after positive earnings news from Microsoft, Motorola and Yahoo. Meanwhile, a report that the Cabinet might allow mainland China investment in the domestic property market also triggered some interest in chasing prices, especially in construction shares, they added. However, the improved sentiment was later damaged in mid-morning trading after reports from Academia Sinica published a downward adjustment for this year’s GDP growth forecast from the previous 5.21 percent published last December to 2.38 percent, the lowest level since 1974.

“Investors are anxious to sell stocks after the report was published,” the broker added. Taiwan Semiconductor Manufacturing Co. fell 0.8 percent to NT$63 while United Microelectronics Corp. shed 0.6 percent to NT$31.7. Financial shares were hammered the hardest due to the heavy selling emerged before the market closed.