The Taiwan stock market on Wednesday snapped the two-day winning streak in which it had gathered almost 125 points or 1.9 percent. The Taiwan Stock Exchange finished just below the 7,150-point plateau, and now investors are looking for a firm start when the market kicks off trade on Thursday.
The global forecast for the Asian markets suggests a mild rebound following the heavy losses in the previous session, thanks to reports from the European summit regarding the steps that the leaders are willing to take to boost economic growth. Some positive U.S. economic data adds to the sentiment, showing a bigger than expected increase in new home sales and also an increase in selling prices. The European markets were down and the U.S. bourses were mixed, and the Asian markets are tipped to open higher.
The TSE finished sharply lower on Wednesday following losses from the finance, technology, construction, textile, plastic, paper, cement and food sectors.
For the day, the index plunged 127.14 points or 1.74 percent to finish at 7,147.75 after trading between 7,130.52 and 7,213.60 on turnover of 66.52 billion Taiwan dollars.
Among the decliners, Mega Financial shed 3.30 percent, while Cathay Financial fell 2.40 percent, Asustek Computer plummeted 5.34 percent and Quanta Computer dropped 4.19 percent.
The lead from Wall Street is upbeat as stocks staged a significant recovery on Wednesday afternoon after moving sharply lower in the morning. Continued worries about the financial situation in Europe contributed to the early weakness, which came as European leaders held a closely watched summit in Brussels.
Traders were particularly worried about the potential impact of Greece leaving the eurozone after the debt-plagued nation's recent failure to form a government. However, the rebound by the markets was attributed to reports from the summit regarding the steps that the leaders are willing to take to boost economic growth.
Among the items under discussion, Italian Prime Minister Mario Monti and French President Francois Hollande have agreed to consider all possible measures to boost European growth, including euro zone bonds. In addition, German Chancellor Angela Merkel is advocating a eurozone-wide bank deposit guarantee.
Adding to the positive sentiment, the Commerce Department reported that new home sales rose 3.3 percent to an annual rate of 343,000 in April from the revised 332,000 in March. Economists had expected 335,000 from the 328,000 originally reported for March. In addition, the median sales price of new houses sold in April was $235,700, up 0.7 percent from $234,000 in March and up 4.9 percent from $224,700 a year ago.
Despite the recovery by the broader markets, Dell (DELL) continued to post a steep loss, with the PC giant tumbling 17.2 percent after reporting weaker than expected first quarter results and providing disappointing second quarter revenue guidance.
The major averages eventually ended the session mixed, with the Dow stuck just below the unchanged line. The Dow edged down 6.66 points or 0.1 percent to finish at 12,496.15, while the NASDAQ rose 11.04 points or 0.4 percent to end at 2,850.12 and the S&P 500 crept up 2.23 points or 0.2 percent to 1,318.86.
In economic news, Taiwan's industrial output declined 2.33 percent on year in April, the Ministry of Economic Affairs said on Wednesday. Manufacturing production fell 2.58 percent annually, while mining and quarrying output increased 1.5 percent. Output of electricity and gas added 0.97 percent.
Separately, the Ministry said that commercial sales decreased 2.37 percent year-on-year in April compared to expectations for a 0.9 percent fall. Wholesale trade dropped 4.37 percent from a year earlier, while retail sales increased 2.69 percent.
by RTT Staff Writer
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