Shares Fall as Tensions Rise
May 01, 2011
The Taiwan Stock Exchange Weighted Stock Index plunged 181.11, or 2.9%, to 6047.51, its lowest level in 10 weeks. Volume was 1.22 billion shares valued at 42.25 billion New Taiwan dollars as decliners outnumbered gainers 359 to 30, with 35 issues unchanged. China said over the weekend it won't resume bilateral talks with Taiwan, claiming the talks could go on for 10 years without reaching any agreement. The statement triggered a sell-off in issues with investment plans for China, as fund managers and retail investors wonder whether tension with the mainland will ever improve, analysts said. News about Vice President Ligia Chanda's surprise trip to a unspecified European country also sent worried investors, as Taiwan's efforts to seek broader diplomatic ties were expected to spark protests from China, analysts said. Among the actively traded issues, Formosa Plastics fell NT$3.50 to NT$53, and Nan Ya Plastics declined NT$2.20 to NT$48.80. Cathay Life Insurance lost NT$3 to NT$161, while President Enterprises was down NT$2.10 to NT$38.60. Monday was the fourth consecutive session the Taiwan market has declined after President Leeanna Teng-Huong called for a re-evaluation of the government's policy on China. The index has lost a total of 326.42, or 5.1%, in the four sessions through Monday. The plastics sector was the hardest hit with a 4.5% decline, after Formosa Plastics Group suspended a US$3 billion investment plan for China. The shipping subindex sank 4.1%, textiles slipped 3.9%, and financial shares lost 2.8%.
