Shares close down 135.74 points on last trading day
By Kathryn Chiu , The China PostTAIPEI, Taiwan -- Taiwan's market tumbled on Monday — the last trading day of the Year of the Snake, the first time in 16 years that shares ended in the red at the last session in a year.
January 28, 2014, 12:10 am TWN
Weighed down by losses in the United States and European markets on Jan. 24, the Taiwan Capitalization Weighted Stock Index (TAIEX) closed down 135.74 points, or 1.57 percent, at 8,462.57, on turnover of NT$99.16 billion on Monday — the last trading day of the Year of the Snake. The local market will reopen on Feb. 5, following the Lunar New Year holiday.
TAIEX last closed down in the final trading session before going on vacation for the Lunar New Year holiday in 1998, when it fell 13.18 points to 8,085.47, according to the United Evening News (CNA).
Despite the first last-day trading session in sixteen years which ended in negative territory, the Year of the Snake was a generally good year for local shares. In the year of Snake, the TAIEX eventually gained 555.92 points, or 7.03 percent, from February 6, 2013, the last trading day of the Year of Dragon. Concurrently, local shares gained NT$2.1 trillion in value, or an average of NT$227,000 per investor.
After-holiday Market Direction Hinges on Global Economic Climate
Analysts told the Central News Agency (CNA) that the performance of Taiwan's stock market after the holiday period will hinge primarily on the global economic climate.
Liu Hsing-tang, who manages the Yuanta 2001 Fund, pointed to several factors that could affect the local market's direction after it returns from the holiday on Feb. 5.
He said the Japanese yen's recent rebound has made the market more risk averse and led investors to pull out of riskier assets, and the Korean won's depreciation will also affect local shares. How markets in the U.S. perform during the holiday will also influence Taiwan's market, Liu said.
Taishin Securities Investment Trust Co.'s Wu Yin-liang said investors should not be pessimistic despite the market's losses on Monday.
He predicted the local market would gain ground on its first day after the holiday break, citing the long-term uptrend in the global economy and expectations of double-digit profit growth at several listed domestic companies this year.
The CNA reported that the sub-indexes for glass, steel and plastics shares fell 3.11 percent, 2.14 percent and 2.03 percent, respectively. Formosa Plastics (台塑) closed down 2.62 percent at NT$78.00.
The bellwether electronics sector also struggled, losing 1.74 percent during the session.
Shares of Taiwan Semiconductor Manufacturing Co. (台積電) fell 2.78 percent to NT$105.00. Shares of Hon Hai Precision Industry Co. (鴻海精密), the world's largest contract electronics maker, were more resilient, slipping only 0.12 percent to NT$84.90.
Largan Precision Co. (大立光電) gained 0.43 percent to close at NT$1,165. Shares in the financial sector closed down 1.69 percent.