Stocks seen to rebound after sharp tumbles

The fifth consecutive tumble of the week shed another 105.35 points to bring the weighted index in Taiwan down to 6,307.28 on a turnover of NT$96.74 billion Friday.

The latest fall lengthened the week’s decline to 739 points, or 10.5 percent, the biggest loss since the week ending on Aug. 13, 2007 which suffered a nosedive of 841 points.

These successive nosedives in the trading session over the past week were attributed mainly to sharp declines on Wall Street.

Securities analysts also pointed out that speculators were cashing in on the public sentiments of Taiwan’s small time investors and political foes, who have stepped up criticisms for the Ma government’s failure to promptly prop up the economy after a long period of inaction by the preceding opposition-led administration for eight years.

International investors were thought to have massively unloaded their stockholdings partly due to the slides on major overseas markets, while aiming to increase pressure on the new government here and sweeten incentives for players on the stock market.

News from the U.S. indicated its government will rush take over both Fannie Mae and Freddie Mac, the two mortgage lending powerhouses, to bolster market confidence and help put a check on Wall Street’s sliding share prices.

The U.S. administration is also expected to adopt additional favorable measures in the coming weeks as the new presidential election draws to its climactic standoff.

The anticipated moves are expected to help lift financial shares in Taiwan too, especially financial holding companies and insurance firms that hold an estimated combined value of NT$616.3 billion of bonds related to the two American financial organizations.

Analysts said Apple Computer’s scheduled debut of new models of it hot-selling iPod gadget in the week is seen to help lift shares of Taiwan enterprises that were contracted to produce the products or supply the parts and components.

Yet securities analysts also cautioned against negative market factors, including the general slowdown in major economies, especially the U.S. and the western European nations.

The latest U.S. government data showed the unemployment rate for August has shot up to 6.1 percent, the highest level in five years.

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