(Bloomberg) -- Taiwan stocks dropped on Monday, weighed by ruling party DPP’s resounding defeat in local elections and amid a broader selloff across Asia.
The benchmark Taiex slid 1.5%, the most since Oct. 13, as investors worried that the government may stop support measures for the market after opposition Kuomintang’s victory at the polls. The party, which favors eventual unification with China, held onto 13 seats at Saturday’s elections.
The riskoff sentiment in Taiwan was in line with a wider decline across the region as protests against China’s Covid restrictions over the weekend prompted traders to re-think investment plans after jumping back in on reopening hopes.
Results of the local elections may only impact markets for a day, according to Li Fang-kuo, chairman at President Capital Management in Taipei. Further out, “we are still positive on the outlook of stocks as Taiex usually rises in December.”
Foreign investors have been recent buyers of local stocks, with November net inflows set for the first positive month in six and the highest since 2007, according to Bloomberg-compiled data.
Read more: Foreign Investors Pile Into Taiwan Stocks by Most in 15 Years
Li said foreign inflows have continued amid “easing concerns for inflation and Fed rate hikes.”
The Taiex index has risen 12% this month, its best in over two years, with index heavyweight Taiwan Semiconductor Manufacturing Co. advancing 23%.
(Updates with prices)
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