Taiwan stock market suffers worst intraday drop in history amid pandemic fears
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Woman looks disheartened as stocks plunge on Taiwan Stock Exchange. Woman looks disheartened as stocks plunge on Taiwan Stock Exchange. (CNA photo)
TAIPEI (Taiwan News) — Taiwan’s stock market dropped by well over 1,000 points on Wednesday morning (May 12), setting a new intraday trading record amid comments by the Central Epidemic Command Center (CECC) head that the local coronavirus outbreak is worsening and a Level 3 alert could be implemented within days.
On Wednesday morning, Health and Welfare Minister and CECC head Chen Shih-chung (陳時中) told the media that the epidemic in Taiwan has reached a “very severe stage.” He also stated that Taiwan’s epidemic warning could be raised to Level 3 in “the coming days.”
Taiwan’s stocks continued their downward trend from the previous day, which saw news of seven local COVID-19 cases and Chen’s declaration that Taiwan had entered the community transmission stage. The index fell by more than 1,000 points in early trading.
By 11:20 a.m., the decline expanded as it broke the 15,200 barrier and plunged by 1,417.86 points, a new intraday trading record decline, according to CNA. Electronics, finance, and traditional industry stocks fell across the board, with only epidemic prevention firms in positive territory.
Chip giant TSMC’s stock price at one stage plummeted to NT$518 (US$18.48), a sharp drop of NT$53 yuan which was a decrease of 9.28 percent, and its market value shrank by NT$1.37 trillion to NT$13.43 trillion, affecting the broader market index by nearly 450 points. Foxconn’s share price fell below the NT$100 mark in intraday trading, with it dropping to as low as NT$96.5.
MediaTek’s stock price also fell by NT$90 down to NT$821. Overall, the electronics stock index fell by 8.65 percent.
Taiwan warns COVID alert level could rise, but not yet, shares tumble
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People wearing protective face masks wait for the metro, during the coronavirus disease (COVID-19) pandemic, in Taipei, Taiwan, May 11, 2021. REUTERS/Ann Wang
Summary Taiwan reports highest daily domestic case count at 16
Health minister backs away from immediately tightening controls
Taiwan stock market closes down 4.1% on lockdown fears
President Tsai says challenge still severe, urges calm
TAIPEI, May 12 (Reuters) - Taiwan reported its largest daily rise in domestic COVID-19 cases on Wednesday, while the stock market tanked after the health minister warned the island could move to a higher alert level, though he later clarified that step was not imminent.
Early and effective prevention steps succeeded in shielding Taiwan from the worst of the pandemic, with just 1,231 infections reported so far.
But markets have been on edge since renewed domestic outbreaks began late last month, with 16 new domestic cases announced on Wednesday setting a record daily high.
Taiwan’s benchmark stock index (.TWII) was down more than 8% at one point in a fall that accelerated as Health Minister Chen Shih-chung told parliament the alert level could be raised, potentially leading to strict new limits on gatherings and closure of non-essential businesses.
The index regained some ground but still closed down 4.1%, its biggest percentage fall since March 2020.
The health minister later told reporters that the government would not be ordering a shift to stiffer restrictions for now.
“We are not going to raise the alert level yet,” Chen told reporters.
While Taiwan has plenty of stocks of personal protective gear, including face masks, people must not rest on their laurels, he added.
“Everyone should be nervous about these domestic cases, and raise their alertness and protect themselves properly.”
President Tsai Ing-wen called on people not to panic, while encouraging them to remain on guard against the virus, maintaining the success that has allowed the economy to boom.
“At this moment the challenge is still severe. Please be alert and follow the guidelines. I believe we will be able to overcome this challenge together,” she said at the headquarters of the ruling Democratic Progressive Party.
CALL FOR CALM IN MARKETS
The vast majority of Taiwan’s cases have been imported from abroad, but the latest spate of domestic cases have worried people as authorities have yet to identify a clear source.
Investors should have confidence that economic fundamentals and the stock market are sound, Taiwan Deputy Finance Minister Frank Juan told Reuters.
But if the situation worsens, Juan said he did not rule out calling a meeting of the National Stabilisation Fund, which the government can use to intervene in case of large fluctuations in the market.
The spectre of restrictions affecting semiconductor production was enough to spook investors already nervous about selling pressure on tech shares, said Khoon Goh, head of Asia research at ANZ Bank.
“Cases are pretty low, but you can see we’re in an environment now where investors are cautious,” he said.
“Even though I doubt very much the restrictions will have an impact on export-orientated sectors, investors are playing it safe and that’s contributed to the selloff.”
Taiwan largely closed its borders early in the pandemic and has a robust contact tracing and quarantine system, allowing life to stay close to normal.
The government this week asked hospitals across Taiwan to allocate enough wards for potential new infections, Chen said, adding they are capable of providing 3,000 beds to treat patients.
(Global vaccination tracker: https://graphics.reuters.com/world-coronavirus-tracker-and-maps/vaccination-rollout-and-access/)
Reporting by Yimou Lee and Ben Blanchard; Editing by Clarence Fernandez
Our Standards: The Thomson Reuters Trust Principles.
Taiwan stock market index plunges below 17,000 mark
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TAIPEI (Taiwan News) — Taiwan’s stock market index, the Taiex, plunged 500 points Tuesday (May 4) morning before closing down 288.57 points, falling below the 17,000 mark.
The 1.68-percent drop saw the Taiex end at 16,933.78 on a record turnover of NT$664.2 billion (US$23.76 billion), CNA reported. The Taiex first broke through the psychological barrier of 17,000 on April 15.
While short-term fluctuations are unavoidable, the economic outlook for the country still looks good in the longer term, with the government recently estimating that economic growth during the first quarter reached 8.16 percent, Finance Minister Su Jain-rong (蘇建榮) said.
Tuesday’s plunge was blamed on the uncertain situation surrounding the coronavirus pandemic, as domestic outbreaks have emerged linked to major carrier China Airlines and a hotel near Taiwan’s main airport. Nevertheless, shares in the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC), still rose by 0.51 percent to reach NT$591.