By Ted Chen , The China Post
TAIPEI, Taiwan — The Taiwan market yesterday plummeted by 91 points and closed at 8,104.26 points, as institutional investors domestic and foreign rushed to oversell about NT$9.119 billion worth of shares.
At the end of yesterday’s session, selling by foreign institutional investors including Chinese companies reached NT$7.919 billion, while domestic securities investment trusts and dealers sold NT$670 million and NT$530 million worth of equities, respectively.
Shortly after the closing bell yesterday, the TAIEX began its descent to under the 24-week average of 8,140 points, with trading volume receding to NT$66.229 billion. The TAIEX was not spared from the influence of recent declines in developing markets while U.S. indices plateau upwards, said a Yuanta Securities (元大寶來) analyst. In addition, it is likely that the recent selling spree may be the result of profit taking by institutional investors as they shift funds elsewhere, the analyst continued.
According to the analyst, the Taiwan market will face tremendous pressure if conditions worsen in the U.S. market, or if the tapering of quantitative easing (QE) measures commence in December. In addition, prospects of economic recovery remain cloudy across the globe, rendering a stalemate that leaves little room for significant movement in the Taiwan market, whether upwards or downwards, the analyst said.
Whether the TAIEX will hold its 52-week average of 7,994 points will be heavily dependent on developments in the U.S. market and the Fed’s decision on QE measures, according to the analyst.