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Taiwan tumbles after ballot
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March 20, 2000: 6:49 a.m. ET
Ruling party's defeat alarms investors; HK rises, led by China Telecom
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LONDON (CNNfn) - Taiwan stocks tumbled sharply Monday, depressing markets across the Pacific Rim, as investors reacted with alarm to the weekend election defeat for the Nationalist Party, which has ruled the territory virtually unopposed in the half century since Chiang kai-Shek fled mainland Communist China.
But Hong Kong closed up nearly 1 percent after a choppy session, as a conciliatory call by Taiwan's president-elect for a "peace summit" with Beijing soothed nerves. Singapore, Malaysia and Jakarta all slumped. Tokyo, the region's bellwether market, was closed for a public holiday.
Investors viewed the victory for pro-independence candidate Chen Shui-bian in Taiwan's presidential election as a shot across the bow of Beijing's political machine that could further strain an already precarious relationship between Taiwan and China.
In the run-up to Saturday's election, Beijing had threatened to use force to thwart any Taiwanese attempts to secede, though it refrained from the overt show of military force that it used during past elections to signal its displeasure with Taiwan's freewheeling ways. This time, Beijing tempered its belligerent tone in the election's aftermath, saying it would wait to judge Shui-bian by his deeds.
Taiwan's key weighted index closed down 2.6 percent at 8,536.05. Late-day demand, pepped up by a massive state-led stock stabilization fund, dragged the index back up from a loss of more than 3 percent through much of the session. The government said it would use cash injections from the T$500 billion fund to support the market "when necessary" over the next two weeks.
 "Panic selling emerged right from the opening amid uncertainties over cross-strait relations after Chen's victory," Nomura Securities analyst Ben Lee told Reuters. Underscoring the jittery mood as investors digested the election results, conglomerates tied to the Nationalist Party - such as Taiwan Cement and food giant Uni-President Enterprises - fared poorly while firms linked to Chen's victorious party, such as Continental Engineering and Evergreen Marine, were in demand.
Elsewhere in Asia, banks and interest-rate-sensitive stocks slipped ahead of a meeting Tuesday at which U.S. Federal Reserve policy makers are expected to raise rates to help cool off the galloping U.S. economy, now in its ninth year of expansion.
Click here for CNN's coverage of the election
Hong Kong's benchmark Hang Seng index finished up 151.47 points, or 0.9 percent, at 17,234.46 after spending most of the day in the red amid concerns about China-Taiwan tensions. The Hong Kong stock exchange serves as an entry point for fund managers wanting to invest in China.
Financial stocks weighed on the index ahead of the U.S. rate decision Tuesday.
Banking giant HSBC Holdings dropped HK$1.50 to HK$88.25, dragging Hong Kong's finance sub-index down nearly 2 percent. Sun Hung Kai properties led declines among developers lower, falling HK$1.25 to HK$68.75, pacing a 1.3-percent slide on the properties index.
Telecom heavyweight China Telecom surged 7 percent surge to HK$72.00 as Morgan Stanley Capital International added the stock to its China Free Index. Among other Chinese-linked "red-chip" companies newly added to the MSCI index, investment company CITIC Pacific and Legend Holdings, China's largest computer maker, both got a strong boost.
In Sydney, the benchmark All Ordinaries index rose 24.7 points, or 0.77 percent, to close at 3,228.1 with index heavyweight News Corp. carrying the market. The media giant, which has a 15.2 percent weighting on the index, rose 6.4 percent after its American Depositary Receipts surged in New York.
Software acquisition
Solution 6 Holdings, a developer of accounting software, rose 35.6 percent to A$12.95 after announcing a A$1.6 billion bid for internet software developer Sausage Software and the acquisition of assets from telecom market leader Telstra. Sausage surged 27.6 percent to A$7.40 and Telstra ended 0.9 percent lower at A$7.69 as it went ex-dividend.
Insurer and fund manager AMP rose 7.8 percent to A$16.91 as brokers Warburg Dillon Read and Deutsche Bank raised their ratings on the stock.
In Singapore, the Straits Times Index ended down 17.37 points, or 0.8 percent, at 2,077.10 as anticipation of a U.S. interest-rate rise Tuesday overshadowed strong domestic trade data for February. The Fed is expected to raise rates by 25 basis points.
South Korea's benchmark index closed slightly lower Monday. The Kospi slipped 5.06 points, or 0.59 percent, to 850.51. Thai stocks rose 0.3 percent to 400.99 amid demand for banks and property companies. In Kuala Lumpur, Malaysian shares fell 0.7 percent as investors waited on the sidelines following Taiwan's elections. Manila shares closed 0.66 percent higher at 1,657.07.
in the U.S. Friday the Nasdaq composite index rose 80.67 points, or 1.7 percent, to 4,798.06 and the Dow Jones industrial average shed 25.91 points to 10,604.69. Still, the blue chips' gain of more than 800 points on Wednesday and Thursday helped the index notch a 6.78 percent gain this week.
In the currency markets, the yen was little changed against the U.S. currency at $0.9714. 
--from staff and wire reports
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