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 The BBC's Matt Frei in Taiwan"Once members of the world's richest political party, today they were reduced to street battles"  real 28k The BBC's Stephen Gibbs"Careful attention will be paid to everything Beijing and Mr Chen say"  real 28k |
Taiwan markets tumble
Chen Shui-bian's election scared many investors
The Taiwanese stock exchange has fallen sharply following the election at the weekend of the pro-independence leader Chen Shui-bian.
Shares fell by around 2.6% as markets responded to the possibility of increased tension with China.
Chen Shui-bian's victory in the presidential election brought an abrupt end to the Nationalist Party's unbroken half-century in power.
The drop in the market was limited by a government decree that the market could not fall by more than 3.5% before trading would be suspended, half the usual limit of 7%.
Most shares opened sharply lower before recovering slightly by close. The Taiwan stock market's weighted price index finished 227.22 points lower at 8,536.05, after falling by as much as 350 points earlier in the day.
The Taiwan dollar fell only fractionally amid heavy central bank intervention despite heavy selling by private investors.
It ended at 30.795 to the dollar.
Fears of invasion diminishing
During the election campaign, there were threats from Beijing of invasion if Taiwan sought independence.
But fears of military action eased after Beijing indicated it would take a "wait-and-see" stance until Mr Chen's inauguration in May.
On Monday, Mr Chen called for a peace summit with Beijing, saying he was prepared to discuss the "One China" issue, as long as Taipei was treated as an equal.
"No-one believes there will be an immediate military conflict in the Taiwan Strait," a broker at Guotai J&A Securities said.
"But everybody is cautious over the longer-term prospects."
Regulating the markets
Finance Minister Paul Chiu imposed the stock market trading limits on Saturday night.
Correspondents say this appears to be a sign that Mr Chiu takes Taiwan's political upheaval to be a market threat of similar gravity to the devastating earthquake in September that closed share dealings for several days.
The outgoing Kuomintang government, which ruled the island for 50 years, has repeatedly appealed for calm and said it would intervene on the markets and prop up share prices and the Taiwan dollar if necessary.
Demonstrations
The headquarters of the Kuomintang party has come under siege by hundreds of party members protesting over its humiliating defeat.
The political uncertainty spooked many investors well before the election result was known.
During the past week shares on the Taipei stock market lost 7.1% of their value, 6.6% on one day alone.
The drop in prices came despite a massive government intervention to prop up the market, using a fund valued at 500 billion Taiwanese dollars ($15bn).
Shares fell by around 2.6% as markets responded to the possibility of increased tension with China.
Chen Shui-bian's victory in the presidential election brought an abrupt end to the Nationalist Party's unbroken half-century in power.
 Analysts say the Taipei stock index could drop below 8,000 points |
Most shares opened sharply lower before recovering slightly by close. The Taiwan stock market's weighted price index finished 227.22 points lower at 8,536.05, after falling by as much as 350 points earlier in the day.
The Taiwan dollar fell only fractionally amid heavy central bank intervention despite heavy selling by private investors.
It ended at 30.795 to the dollar.
Fears of invasion diminishing
During the election campaign, there were threats from Beijing of invasion if Taiwan sought independence.
 Fears of military action from China have eased |
On Monday, Mr Chen called for a peace summit with Beijing, saying he was prepared to discuss the "One China" issue, as long as Taipei was treated as an equal.
"No-one believes there will be an immediate military conflict in the Taiwan Strait," a broker at Guotai J&A Securities said.
"But everybody is cautious over the longer-term prospects."
Regulating the markets
Finance Minister Paul Chiu imposed the stock market trading limits on Saturday night.
 |
The outgoing Kuomintang government, which ruled the island for 50 years, has repeatedly appealed for calm and said it would intervene on the markets and prop up share prices and the Taiwan dollar if necessary.
Demonstrations
The headquarters of the Kuomintang party has come under siege by hundreds of party members protesting over its humiliating defeat.
The political uncertainty spooked many investors well before the election result was known.
During the past week shares on the Taipei stock market lost 7.1% of their value, 6.6% on one day alone.
The drop in prices came despite a massive government intervention to prop up the market, using a fund valued at 500 billion Taiwanese dollars ($15bn).
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