-- Index posts biggest one-day fall in almost two months
-- Financial shares down on proposed US bank policy Turnover rose to T$147.8 billion ($4.6 billion) from Thursday's T$128.6 billion. "Obama's move is to prevent another financial crisis from happening," said Alex Huang, a director with Mega International Securities Co. "But investors around the world are worried that their governments will restrict their monetary policies." "If governments make this move, it will have an impact on stock markets as their rise since last year has been because of money inflows," said Huang.
US President Barack Obama threatened to fight Wall Street banks on Thursday with a new proposal to limit financial risk taking, sending stocks and the dollar tumbling. Cathay Financial, the island's biggest listed financial holding firm, slipped 2.74 percent to a one-month closing low, dragging the financial sub-index 2.48 percent lower.
Smaller rivals Fubon Financial fell 2.61 percent and Shin Kong Financial ended down 3.69 percent. Construction and technology counters also lost ground as investors feared that the new restrictions could cause consumers to pull back on spending and hit corporate earnings.
Farglory Land Development was down 3.01 percent while rival Chien Kuo Construction dropped 2.15 percent, pulling the construction sub-index 1.76 percent lower. The world's No 2 PC brand Acer slipped 5.28 percent and electronics parts maker Hon Hai Precision slid 5.48 percent to a one-month closing low, with the electronics sub-index down 2.74 percent.
The TAIEX is likely to trade between 7,900 and 8,100 points next week, said Mega's Huang. Chi Mei Optoelectronics bucked the trend, climbing 1.18 percent. "Some LCD plays rose possibly on clear visibility of orders from China," said Katty Wang, a fund manager with Prudential Financial Securities Investment Trust. Synnex Technology International Corp fell 1.49 percent even after a local newspaper reported that the company had been removed from the Taiwan Stock Exchange's list of companies that Chinese qualified investors are forbidden to invest in.