The Taiwan stock market on Monday wrote a finish to the three-day losing streak in which it had given away more than 200 points or 2.9 percent. The Taiwan Stock Exchange finished just above the 7,135-point plateau, and now investors may be tempted to lock in gains when the market opens on Tuesday.
The global forecast for the Asian markets is cautious with a tight range, as ongoing concerns over European debt are exacerbated by a lack of other impetus since the U.S. markets were closed on Monday for Memorial Day. The Swiss National Bank is considering setting up a task force to draw an emergency plan for dealing with a possible collapse of the euro, though the bank believes such a scenario is highly unlikely. Further, record borrowing costs and bank troubles in Spain continue to suggest that it could possibly be the next nation to seek international financial assistance. The European markets were mixed but little changed, and the Asian bourses are tipped to follow suit.
The TSE finished modestly higher on Monday following gains from the finance, technology, food, cement, textile, construction, plastic and paper sectors.
For the day, the index climbed 64.37 points or 0.91 percent to finish at the daily high of 7,136 after trading as low as 7,047.32 on turnover of 44.17 billion Taiwan dollars. There were 1,847 gainers and 1,736 decliners, with 522 stocks finishing unchanged.
Among the gainers, Yuanta Financial Holding climbed 3.11 percent, while Mega Financial Holding jumped 2.27 percent, China Development Financial Holding collected 2.17 percent, Taiwan Semiconductor Manufacturing Co. added 2 percent, Hon Hai Precision Industry gathered 1.55 percent and AU Optronics spiked 2.11 percent.
There is no lead from Wall Street, although the news from Europe suggests plenty of caution, aside from the ongoing and growing concerns over Greece and Spain.
Italy's borrowing costs increased on Monday as fears over Greece exiting the euro currency. The treasury raised EUR 3.5 billion from new May 2014 zero-coupon bonds, matching the maximum target set for the auction - but the gross yield rose to 4.037 percent. Earlier in April, average yield on a similar 2-year bond was 3.36 percent. The treasury also sold EUR 332.5 million BTP maturing on 2017 and EUR 417.5 million five-year 2016 BTP.
In addition, Italian business confidence fell more than expected to its lowest level since August 2009, the statistical office Istat said on Monday. The business sentiment index dropped to 86.2 in May from 89.1 in April.
The Swiss National Bank is considering setting up a task force to draw an emergency plan for dealing with a possible collapse of the euro, though the bank believes such a scenario is highly unlikely, SNB President Thomas Jordan said Sunday.
One measure being considered is capital controls. Swiss policymakers imposed a ceiling of 1.20 versus euro last September to stem excessive gains in the currency following the worsening of the Eurozone debt crisis. Jordan said that the central bank will continue to enforce the minimum exchange rate even under adverse economic conditions.
The major European markets were mixed on Monday as Germany's DAX was down 16.75 points or 26 percent to finish at 6,323.19. The CAC in France eased 4.97 points or 0.16 percent to end at 3,042.97 and London's FTSE added 4.81 points or 0.09 percent to end at 5,356.34.
In economic news, Taiwan's leading economic index increased 0.6 percent on month in April, the Council for Economic Planning and Development said on Monday. In March and February, the index rose 0.7 percent and 0.8 percent respectively. In the six months ended April, the annualized index increased 6.6 percent.
In addition, the coincident economic index, which measures the current situation, advanced 0.5 percent on a monthly basis to 129.5 in April. The lagging index moved 0.4 percent month-on-month to 139.7, while the monitoring indicators showed a total score of 14 in April, unchanged from the previous month.
by RTT Staff Writer
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