TAIPEI: Taiwan shares came under pressure soon after the local main board opened Wednesday, falling below 8,300 points as investors took cues from a plunge on Wall Street and the European markets overnight after a sharp devaluation of the Chinese yuan to dump their holdings here, dealers said.
The financial sector led the downturn amid fears that local financial institutions will incur losses resulting from their yuan-denominated investments, while the bellwether electronics sector appeared resilient on hopes that the Taiwan dollar will follow the yuan to depreciate in a bid to protect Taiwan’s exports, they said.
As of 10: 57 a.m., the weighted index on the Taiwan Stock Exchange had fallen 1.33 percent to 8,282.33 on turnover of NT$51.72 billion (US$1.61 billion). The financial sub-index was down 4.48 percent, and the electronics sector was 0.95 percent lower.
“A move by the People’s Bank of China (PBOC) to set the reference rate of the yuan by 1.86 percent lower yesterday to plunge the Chinese currency to a three-year low against the U.S. dollar, reflects a currency depreciation competition in the region which has been escalating,” Hua Nan Securities analyst Henry Miao said.
