Taipei - Taiwan's stockmarket plunged 2.72 per cent Monday amid bearish sentiment triggered by foreign fund outflows and a money laundering scandal allegedly implicating former Taiwan president Chen Shui-bian and his family, dealers said.

The Weighted Price Index of the Taiwan Stock Exchange, which opened lower with weak momentum, extended its downward trend to end at 7,000.74, a plunge of 195.76 points or 2.72 per cent, from the previous trading session.

Dealers said early trade was dragged down by jittery investors dumping financial shares after Taiwan judicial authorities launched probe into alleged money laundering of the former president and barred him from leaving Taiwan, pending questioning. The financial sub-index lost 4.83 per cent at the close.

Chen admitted late last week his wife had wired 20 million US dollars abroad, but denied it had anything to do with money laundering. Some Taiwan's parliamentarians claimed part of the funds allegedly came from some businessmen, following a series of bank mergers as part of the second financial reform programme carried out by the previous Chen government, an allegation sternly rejected by the ex-leader.

Dealers said foreign fund outflows and depreciation of the Taiwan dollar against the US dollar weakened the amount of funds for market play, resulting in the turnover shrinking to 82.84 billion Taiwan dollars (2.7 billion US).

Foreign institutional investors have moved their funds out by selling more than 20 billion Taiwan dollars (638 million US) over the last three trading sessions. The local currency continued its depreciation trend on Monday, weakening to around 31.3 Taiwan dollars in mid-day trade to one US dollar, dealers said. (dpa)