The Taiwan stock market on Wednesday ended the two-day losing streak that cost it 8.78 percent and sent it to a fresh 34-month closing low. The Taiwan Stock Exchange was able to reclaim support at 5,800 points, but analysts suggest that the market will hand it right back in a flurry of selling on Thursday, following the rest of the region to the downside.
The global forecast is unforgiving once again as turmoil in the financial sectors around the world is expected to drag the markets sharply lower again on Thursday. The failure and consolidation of financial institutions, both fact and rumor, have investors in a downright panic round the world. Weak housing data out of the United States only fanned the flames, sending Wall Street into free fall once again - and the Asian bourses are likely to follow suit.
The TSE finished modestly higher on Wednesday, boosted by a cut in bank reserve ratio requirement. Gains among the transport, electronics and steel stocks were offset by weakness among the financial, tourism and construction stocks.
For the day, the index gained 44.28 points or 0.77 percent to close at 5,800.87 after trading between 6,027.29 and 5,747.30 on turnover pf 102.66 billion Taiwan dollars. There were 937 decliners and 829 gainers, with 384 stocks finishing unchanged.
Among the gainers, Taiwan Semiconductor Manufacturing Co (TSMC) rose 3.73 percent, while United Microelectronics (UMC) added 1 percent, Hon Hai Precision surged 3.96 percent, MediaTek jumped 2.38 percent, Hua Nan Financial advanced 3.65 percent, SinoPac rallied 5.05 percent, EVA Airways gained 4.08 percent and China Steel rose 2.84 percent. Finishing lower, Shin Kong Financial was limit-down 7 percent, while Cathay Financial shed 4.48 percent and Cathay Real Estate plunged 4.62 percent.
The market draws another brutal lead from Wall Street as stocks ended another volatile session with substantial losses on Wednesday, with investors fearing that a government bailout of AIG (AIG) would not stem the freefall in the financial markets. The fear in the financials sent the Dow down nearly 450 points.
Late Tuesday, the Federal Reserve Board said that the Federal Reserve Bank of New York is providing a two-year, $85 billion secured revolving credit facility to beleaguered AIG in return for a 79.9 percent stake in the company. The U.S. reversed its opposition to a bailout after the Federal Reserve concluded that "a disorderly failure of AIG could add to already significant level of financial market fragility." The loan is expected to be repaid from the proceeds of the sale of the company's assets.
This week's bankruptcy declaration by Lehman Brothers, the acquisition of Merrill Lynch by Bank of America, the search for a buyer by Morgan Stanley and the dire straights of Washington Mutual all have combined to bring the financial sector to a state of panic.
Adding to the skittishness in the markets, Reserve Primary Fund became the first money market fund to expose investors to losses in 14 years after it wrote off $785 million in debt issued by Lehman Brothers. After shareholders pulled more than 60 percent of the fund's assets, the net asset value fell below the $1 per share price paid by investors.
Statistically, new residential construction fell by much more than expected in the month of August, according to a report released by the Department of Commerce on Wednesday, with housing starts falling to their lowest level in over 17 years. Housing starts fell 6.2 percent to an annual rate of 895,000 from the revised July estimate of 954,000. Economists had expected housing starts to fall to an annual 950,000 from the 965,000 originally reported for the previous month.
The major averages saw selling pressure intensify in the final hour, sending the Dow and Nasdaq to two-year lows and the S&P 500 to a three-year low. The Dow closed down 449.36 points or 4.1 percent at 10,609.66, the Nasdaq closed down 109.05 points or 4.9 percent at 2,098.85 and the S&P 500 closed down 57.20 points or 4.7 percent at 1,156.39.
In economic news, Taiwanese authorities have banned 22 Chinese companies from exporting dairy products to the island because the companies produced tainted baby formula linked to infant deaths in China, the Department of Health said on Wednesday. That's one day after the Chinese authorities announced the baby milk powder made by the 22 companies contains melamine, a chemical used in plastics. The tainted milk has been linked to three baby deaths and thousands of cases of infant sickness in China.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.