TAIEX starts off year on low note, falls 183 points

Taiwan stocks started off the New Year on a subdued note as the TAIEX index dropped nearly 200 points amid declines in most Asian stocks.

The TAIEX closed at 8,323.05, down 183.23 points.

At one point during the trade the index gained. But by noontime, stocks in Taiwan as well as in other parts of Asia began to plummet on reports of a bomb blast in Sri Lanka, sparking concerns of terrorist attacks in the region.

The Tamil Tigers, designated a terrorist group by the U.S., European Union and India, have been fighting for 24 years in a conflict in Sri Lanka that has killed more than 70,000 people.

"The latest bombing is a reminder of political tensions scattered around the world," said Ashley Kang, who helps manage US$1.7 billion at IBT Securities Co. in Taipei. "Such radical actions added risks to stock investments."

Meanwhile, stocks also fell on concerns U.S. consumer demand will falter after reports showed the growth of online spending slowed. The U.S. is Taiwan's No. 2 export market, after China.

Online spending in the U.S. grew 19 percent from Nov. 1 through Dec. 27, slowing from 26 percent last year, ComScore Inc. said. It was the smallest advance since ComScore began reporting the figures in 2002.

Hon Hai, Taiwan's biggest electronics company, fell NT$7.5, or 3.7 percent, to NT$194.5. AU Optronics Corp., the island's largest LCD maker, dropped NT$2.7, or 4.3 percent, to NT$60.8. High Tech Computer Corp., the world's biggest maker by volume of handsets based on Microsoft Corp.'s Windows operating system, declined NT$20, or 3.3 percent, to NT$579.

Uni-President Enterprises Corp., which supplies instant noodles in Taiwan and China, dropped NT$1.9, or 4.3 percent, to NT$42. Formosa Plastics Corp., the world's second-largest maker of polyvinyl chloride, or PVC, declined NT$3.1, or 3.4 percent, to NT$88. Formosa plans to invest US$50 million in a steelmaker in China, pending Taiwanese government approval.

Mega Financial Holding Co., Taiwan's third-largest financial company by market value, declined 35 cents, or 1.8 percent, to NT$19.6. Mega said its Chairman Cheng Shen-chih offered to resign for personal reasons. The resignation will be effective on Jan. 15, the company said in a statement to the Taiwan Stock Exchange, without elaborating.

According to data of Taiwan Stock Exchange, over the past 11 years, seven times the TAIEX rallied on the first trading day of the year, and four times the index declined.

In 2000, stocks rose by 307 points on the first day of trading, the biggest in TAIEX history.

The first trading day of 2007 saw stocks increase by 97 points.

Yesterday's 183-point fall was the second biggest decline in 11 years. The biggest first-day decline in TAIEX history happened in 1999, when the index fell 266 points.