Taipei shares -- 2 (market fall to test government support at 5,000 pts)

At 10:42 am, the weighted index was down 132.47 points at the day's low of 4,979.20 on turnover of 17.34 bln twd. 

	    The Taiwan dollar was at 33.193/dollar, off a low of 33.20.

	    National Securities head of institutional sales Oliver Fang said the market set out on a downward trend from the outset on a number of negative factors, including full realisation that Taiwan did not emerge a major beneficiary from the latest MSCI changes. 

	    Investors also took negatively the fact that the government under President Chen did not offer any fresh stimulus measures to coincide with the first anniversary of his inauguration on May 20, he said. 

	    "In particular, the proposal for the Taiwan dollar to slide to 40.00 twd/dollar, no matter how incredible it may look, sufficed to scare quite a few investors away from an already sluggish stock market. 

	    "Today's selling should not be entirely attributed to foreign investors just because of currency concerns. In my house, foreign clients actually remained avid about bargain-hunting."

	    Government support could be detected this morning, especially soon after the market breached 5,000 points for the first time at around 9:30 am, he said. 

	    However, it remains to be seen if such support will prove useful in turning around both the equity and foreign exchange markets towards the end of the day, he added.

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