Taiwan stocks plunged 3.82 percent to a 13-month closing low on Monday, joining other declining Asian bourses following a downgrade of the US credit rating. Tech and financial issues such as Cathay Financial led falls. But Apple supplier Largan Precision and some other heavyweights closed higher amid speculation that the government's four pension funds would support the market by buying shares, after President Ma Ying-jeou on Sunday urged investors to stay calm amid the global economic crisis.
"The US downgrade had been expected by investors. It's the weak market confidence pushing down stocks today," said J. J. Lee, chief investment officer of Fubon Financial' s fund arm. "Investors are waiting to see if the Fed will take action to further ease monetary policy when it meets this week." The main TAIEX index dropped 300.33 points to 7,552.80, its lowest closing level since July 2010 and expanding its loss to over 9 percent since Friday.
The electronics sub-index shed 3.64 percent and the financial sub-index was off 4.32 percent. Cathay Financial, Taiwan's top financial holding firm, was down by its maximum 7 percent daily limit. Largan rose 0.68 percent and Mediatek, Taiwan's top chip design house, shot up 3.13 percent.