TAIEX ends above 7,000 points on reported tax plan changes


CNA

TAIPEI — The local bourse staged a technical rebound yesterday to return to the 7,000-point level after Kuomintang lawmakers revised their proposal on taxing capital gains on securities to make it more favorable to market movers, dealers said. In the latest revision of a plan that observers feel is the most likely of many proposals under consideration to make it through the Legislature, major shareholders of listed companies and high-income earners will no longer be targeted by the plan, they said.

Despite the rebound, turnover stayed thin as market sentiment remained haunted by lingering concerns over debt problems in the eurozone, which has dragged down the global economy, they added.

The weighted index closed up 105.79 points, or 1.53 percent, at 7,000.45, after moving between 6,967.31 and 7,037.57, on turnover of NT$62.50 billion.

The market opened 1.49 percent higher and moved to the day’s high after investors hailed the revised tax plan, which would no longer require people who hold a 3-percent or higher stake in a listed company or those who earn a net income of more than NT$5 million, excluding gains on stock trades, to pay capital gains taxes. In the currency market, the U.S. dollar moved lower against the New Taiwan dollar, losing NT$0.05 to close at NT$30.000 after the local bourse rebound, boosting demand for the local currency, dealers said. The greenback opened at NT$30.060 and moved between NT$29.910 and NT$30.070 before the close. Turnover totaled US$662 million during the trading session. Many traders were betting that the G-7 leaders will soon map out measures, including closer cooperation among the countries, to take on the ongoing financial crisis in the eurozone, which has dragged down the value of most currencies against the U.S. dollar in recent sessions, dealers said. Hopes are also high that the European Central Bank will also act to boost the economy in its policymaking meeting scheduled for Wednesday, dealers said. The euro rebounded from a nearly two-year low against the U.S. dollar overnight amid improved sentiment toward the financial situation in Europe, adding to the downward pressure on the U.S. dollar against the New Taiwan dollar yesterday, they said.