Taiwan sees a small outbreak, and its stock market plunges.


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Growing concerns in Taiwan about a small but worsening coronavirus outbreak drove a sharp intraday plunge in its stock market on Wednesday, as investors worried about new government restrictions on businesses in a place that has largely escaped the pandemic.

On Wednesday morning, Taiwan’s health minister, Chen Shih-chung, said that the island’s new outbreak has reached a “very severe stage” and that restrictions could be upgraded in “the coming days.” He spoke after the government reported 16 new cases of local infection on Wednesday and seven on Tuesday.

The Taiwan Stock Exchange weighted index slumped as much as 8.6 percent intraday following the news, a nearly 13 percent loss from its April peak. The market regained some ground later in the day and finished down 4.1 percent.

Taiwan has been a rare success story in a pandemic-stricken world. The island democracy threw up its borders when the pandemic first began to spread from mainland China and has heavily limited travel. It has recorded only 1,210 total cases, according to a tally by The New York Times.

But the authorities haven’t been able to trace the handful of cases that have popped up in recent days, raising questions about whether the government will limit the number of people who can gather within restaurants or other businesses.

Taiwan instituted some Covid-related restrictions on Tuesday, the first in a long time. It suspended large events, limiting outdoor gatherings to 500 people and indoor gatherings to 100 people. On Wednesday morning, the health minister said that the restrictions might be stiffened within days.

Taiwan’s stock market was also hit by a broader global tech selloff, though its losses were greater than those suffered on Tuesday in Wall Street. Shares fell on worries about inflation and over whether the long-running boom in technology stocks would last.

Drops in two of Taiwan’s technological corporate heavyweights — Taiwan Semiconductor Manufacturing Co., a leading chip maker, and Hon Hai Precision Industry Co., known as Foxconn and a contract manufacturer for Apple and other big firms — put the biggest drag on the market.

The chip company, known as T.S.M.C., has reaped benefits from a surge in gadget sales amid the pandemic, but it is also squarely in the middle of tensions between the United States and China over which has greater say in the future of technology. It dropped more than 6 percent at one point on Wednesday and ended nearly 2 percent lower.

Hon Hai on Tuesday said output at a factory in India has slumped because workers infected with Covid-19 have had to leave their posts. Hon Hai dropped nearly 8 percent at one point and ended down more than 3 percent.


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