TAIPEI - TAIWAN on Sunday announced further measures to cushion the impact on the island's stock market of the spiralling global economic crisis.

Beginning from Monday through Friday, the daily downward limit on the stock market will be halved from the current 7.0 per cent to 3.5 per cent to stabilise prices while the daily upward 7.0 per cent limit will stay unchanged.

A ban on the short-selling of stocks imposed last week by Taiwan's financial regulator will be extended from Tuesday to the end of December and the government stock stabilisation funds will keep investing in the market.

'The measures were aimed to offset the short-term impacts' which led to a plunge of around 7.0 per cent in Asia's major markets last Friday when the local market was closed for a national holiday, minister Gordon Chen of the Financial Supervisory Commission told reporters.

The commission has made it clear that suspension of trading was not on the government's list of options.

Analysts say Taiwan's weighted index may test the key 5,000-point level and even fall to the 4,600-4,700 point mark this week.

In the week to October 9, the index closed down 611.52 points or 10.65 per cent at 5,130.71 after a 3.16 per cent fall a week earlier.

Pressure has been mounting on the government of President Ma Ying-jeou as an increasing number of his supporters are losing patience.

Mr Ma, who assumed the presidency earlier this year, made a campaign promise to revive the island's flagging economy. He pledged to achieve six per cent annual economic growth, although he gave no time frame.

Taiwan's exports in September fell 1.6 per cent from a year earlier to 21.85 billion US dollars, in the first year-on-year decline in 18 months.

Last month Mr Ma appointed his deputy Vincent Siew to lead an ad hoc economic advisory panel to help cope with the global economic downturn.

Mr Siew, a veteran economist, is widely credited for leading Taiwan safely through the 1997 Asian financial storm as then prime minister. -- AFP