Taiwan stocks are expected to slide three percent on Monday, as investors flee political uncertainty after a razor-thin election result that prompted a call for a recount and sent protesters onto the streets.
President Chen Shui-bian narrowly won re-election on Saturday, a day after he was shot and wounded in an assassination attempt, but opposition leader Lien Chan demanded the result be declared invalid.
The finance ministry could move on Monday to tighten limits on share price moves so as to stabilise trading in a market that had been bid up in anticipation that an opposition win would lead to stronger economic ties with China, analysts said.
The central bank was expected to support the Taiwan dollar, as it did after the shooting on Friday, insulating the currency market from Taiwan's worst crisis in years.
Analysts say the main Taiwan Weighted index could slump around 200 points on Monday - a fall of around three percent from Friday's close at 6,815 before Chen was shot - and fall further through the week if the crisis was not resolved quickly.
The unprecedented move to nullify the poll and consequent possible instability would hit China-related and transportation shares such as Taiwan's China Airlines the hardest after recent steep rises, analysts said.
Other issues that could be targets of heavy selling are Evergreen Marine, the world's third-largest shipper by capacity, and Uni-President Enterprises, a big investor in China. Shares in both have jumped more than a third so far this year.
Foreign investors could also pull out of the market, adding pressure on the Taiwan dollar if funds were repatriated.
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