Taiwan stocks rally 5.27% in wake of justices' ruling

Asian Economic News, Jan 22, 2001

TAIPEI, Jan. 16 Kyodo

Taiwan stock prices on Tuesday soared 5.27% after Taiwan's constitutional watchdog on Monday stopped short of declaring the government's decision to scrap a controversial nuclear power plant was unconstitutional.

The Taiwan Stock Exchange Weighted Index (TAIEX), which opened slightly higher, continued to rally throughout the four and one-half hour session to close near the day's high at 5,662.94, up 283.28 points or 5.27%.

The benchmark index moved between the opening low of 5,399.70 and an intra-session high of 5,665.29.

It was the index's highest close since mid-November last year. Since the beginning of this year, the TAIEX, which shed 44% of its value last year, has gained more than 19%.

Turnover shrank to NT$59.466 billion Monday, as investors stayed on the sidelines in anticipation of the justices' ruling, but improved markedly on Tuesday to NT$128.630 billion.

A total of 3.81 million lots of 1,000 shares changed hands Tuesday, compared with 1.99 million on Monday.

The Council of Grand Justices ruled Monday that Premier Chang Chun-hsiung committed a ''procedural flaw'' by announcing the cancellation of the nuclear power plant without first reporting to the legislature and seeking its approval.

The legislature is controlled by opposition parties, which supported the proposed plant.

The justices also suggested several measures that could be taken should the Democratic Progressive Party minority government and the legislature remain at loggerheads over the plant after Chang has made his report.

Market players apparently saw this as a sign that the current government-opposition standoff, which is partly blamed for last year's stock market collapse, is headed toward a resolution in coming months.