Taipei - Taiwan's stockmarket tumbled 4.89 per cent on Tuesday, falling below the key 6,000 level for the first time since November 2005, amid a sharply bearish sentiment brought on by US financial woes, dealers said.

The Weighted Price Index of the Taiwan Stock Exchange opened down 5.03 per cent and continued to tumble until after the government stepped in to ease the sliding trend. In the end, the local index lost 295.86 points or 4.89 per cent to close at 5,756.59, dealers said.

They said the Lehman Brothers' filing for bankruptcy on Monday, the forced sale of Merrill Lynch to Bank of American and the credit turmoil of American International Group 
(AIG) Inc sharply dampened market sentiment, with jittery investors dumping their holdings.

All major sectors dipped, with the financial sub-index suffering the worst hit, shedding 6.8 per cent to become the day's biggest loser, followed by paper's 6.7 per cent, construction's 6.67 per cent and cement's 6.55 per cent.

According to the Financial Supervisory Commission, Taiwan's financial firms and retail investors have about 80 billion Taiwan dollars' (2.5 million US) exposure to investments of Lehman Brothers.

Vice Premier Paul Chiu Tuesday instructed four state-owned funds and banks to buy stocks at lows. (dpa)