The Taiwan stock market has moved higher now in three straight sessions, rising more than 400 points or 4.6 percent in that span. The Taiwan Stock Exchange finished just above the 7,270-point plateau, although now investors are bracing for profit taking when the market kicks off trade on Wednesday.
The global forecast for the Asian markets is negative, with investors likely to lock in gains after many of the regional bourses rallied sharply earlier in the week. In addition, traders are likely to move to the sidelines amid expectations that the ECB will unveil new measures this week to drive down the cost of financing. Investors are also awaiting an announcement by the U.S. Federal Reserve on Wednesday and the U.S. jobs report on Friday. The European and U.S. markets were down, and the Asian markets are expected to follow that lead.
The TSE finished sharply higher on Tuesday following gains from the plastic, technology, textile, finance, cement, construction, food and paper sectors.
For the day, the index spiked 111.61 points or 1.55 percent to finish at the daily high of 7,270.49 after trading as low as 7,140.53 on turnover of 80.17 billion Taiwan dollars.
Among the actives, Taiwan Semiconductor Manufacturing Co. surged 2.53 percent, while Hon Hai Precision Industry climbed 2.17 percent, Formosa Plastics collected 1.97 percent, Nan Ya Plastics surged 4.09 percent and Catcher Technology plummeted by the 7 percent daily limit.
The lead from Wall Street suggests mild consolidation as stocks moved modestly lower on Tuesday amid subdued selling pressure. Uncertainty ahead of monetary policy decisions from both sides of the Atlantic contributed to the weakness.
Stocks turned in a lackluster performance for most of the day, as traders seemed reluctant to make any significant moves ahead of the announcements. However, modest selling pressure emerged going into the close of trading.
Traders shrugged off a batch of largely upbeat economic data as Standard & Poor's reported a bigger than expected increase in home prices, while a report from the Institute for Supply Management - Chicago showed that Chicago-area business activity unexpectedly expanded at a faster rate in July.
The Conference Board also reported an unexpected improvement in consumer confidence in July, with consumers becoming more optimistic about the short-term outlook. And a separate report from the Commerce Department showed that consumer spending unexpectedly come in roughly flat in June despite a bigger than expected increase in personal income.
On the earnings front, drug giant Pfizer reported Q2 earnings that rose year-over-year and beat estimates, while revenues also exceeded expectations. Aetna also reported better than expected second quarter earnings and raised its full-year guidance. Humana reported second quarter earnings that fell by more than expected and lowered its full-year guidance.
After showing a lack of direction for much of the session, the major averages all ended the day in the red. The Dow fell 64.33 points or 0.5 percent to finish at 13,008.68, while the NASDAQ slipped 6.32 points or 0.2 percent to end at 2,939.52 and the S&P 500 dropped 5.98 points or 0.4 percent to 1,379.32.
In economic news, Taiwan's economy contracted unexpectedly in the second quarter of 2012, the latest figures from the Directorate General of Budget, Accounting & Statistics said on Tuesday. The gross domestic product fell 0.16 percent year-on-year in the second quarter against expectations for a 0.5 percent growth. This was the first decline in economic output since the third quarter of 2009, when GDP was down 1.41 percent.
The worse than expected outcome follows a 0.39 percent expansion on the first quarter and a 1.85 percent growth in the final quarter of 2011. On a seasonally adjusted basis, the GDP rose by an annualized 3.16 percent quarter-on-quarter.
by RTT Staff Writer
For comments and feedback: email@example.com