Monday, 24 August 2015 12:43
TAIPEI: Taipei shares tumbled more than seven percent Monday in the island’s steepest ever intra-day decline, weighed down by a slump in Chinese equities and a stagnant domestic economy.
The losses came amid a rout in shares across Asia, led by a more than eight percent fall in Shanghai, after concerns about the Chinese economy sparked a sell-off in global financial markets.
Taipei stocks tumbled 583.85 points to 7203.07 in morning trading, a drop of 7.49 percent, before clawing back to 4.86 percent down by 0345 GMT.
Taiwan’s government on Sunday imposed measures to stabilise stocks after heavy recent losses, including banning short-selling below the previous session’s closing prices and encouraging the banking sector to buy back their stocks.
“Given the close economic ties with China, the slowing economy in China has hurt Taiwan economically, aggravated by the crash of Chinese markets,” Mason Li, head of Taishin Securities Investment Advisory, told AFP.
Previously frosty ties with China have warmed under current Beijing-friendly president Ma Ying-jeou, leading to trade deals in a bid to boost the domestic economy.
However, Taiwan’s growth has continued to slow as growth in its giant neighbour stalls, and as local companies struggle to compete with Chinese manufacturers and technology companies.
“The rise of Chinese supply chains competes with local suppliers,” said Li.
Taiwan slashed its growth forecast for 2015 this month to a lower-than-expected 1.56 percent, saying the economy was losing strength due to weak demand from abroad and stiffer competition from China in the vital tech sector.
