The Taiwan stock market has finished higher in two of the last three sessions, recovering from a fresh 34-month closing low. The Taiwan Stock Exchange finished last week lower by 5.39 percent, but analysts are calling for another performance sharply to the upside again on Monday - with the market possibly reclaiming support at 6,000 points.
The global forecast for the Asian markets is sky-high on optimism ahead of the U.S. government's bailout package for the troubled financial sector. Coupled with other adjustments to the financial system, a general outline of the plan was enough to send the U.S. markets rocketing into positive territory to finish an extremely volatile week in the green - and the Asian markets are forecast to follow that lead.
The TSE finished sharply higher on Friday, paced by major gains among the financial stocks that had been so oversold in recent weeks, while the tourism, cement, steel and electronics stocks also posted significant gains.
For the day, the index jumped 328.43 points or 5.82 percent to close at 5,970.38 after trading between 5,858.19 and 5,982.64 on turnover of 105.33 billion Taiwan dollars. There were 1,686 gainers and 233 decliners, with 257 stocks finishing unchanged.
Among the gainers, Hon Hai Precision, Evergreen Marine, Taiwan Cement, Far Eastern Textile, Taiwan Semiconductor Manufacturing Co (TSMC), United Microelectronics (UMC), Wistron, Nan Ya Plastics, Formosa Chemicals & Fibre, Formosa Petrochemical, Cathay Financial, First Financial and Chinatrust Financial all finished higher by the 7 percent daily limit.
The market draws another broadly positive lead from Wall Street as stocks turned in a standout performance on Friday, adding to substantial gains posted in the previous session to erase the selloff seen earlier in the week. The strength came amid a series of government initiatives to help deal with the credit crisis that has been plaguing the financial markets.
Earlier in the day, Treasury Secretary Henry Paulson outlined his department's plan to establish a trust fund to absorb banks' bad debts, stating that, despite the cost taxpayers will have to bear for the fund, the alternative would have been far worse. Paulson said the most recent proposal would address the "root cause" of the financial crisis: mortgage-backed securities stemming from the housing crisis.
Wall Street also got a boost when the government issued a temporary ban on short selling for a list of nearly 800 financial firms. Also, the Treasury Department also established a temporary guaranty program for the money market fund industry, while the Federal Reserve Board announced two new enhancements to existing programs to promote liquidity.
The first initiative extends the realm of non-recourse loans at the primary credit rate to U.S. depository institutions and bank holding companies. The second initiative will allow the Federal Reserve to buy federal agency discount notes from primary dealers. These notes are short-term debt obligations issued by Fannie Mae (FNM), Freddie Mac (FRE) and the Federal Home Loan Banks.
The major averages moved to the upside in the final hour of trading, but they ended the day well off of their session highs. The Dow closed up 368.75 points or 3.4 percent at 11,388.44, the Nasdaq closed up 74.80 points or 3.4 percent at 2,273.90 and the S&P 500 closed up 48.56 points or 4 percent at 1,255.07.
While stocks saw considerable weakness early in the week, the major averages rebounded in the last two days to close modestly higher. The Dow ended the week up 0.3 percent, while the Nasdaq and the S&P 500 posted weekly gains of 0.6 percent and 0.3 percent, respectively.
In economic news, Taiwan is on Monday set to announce August data for commercial sales and seasonally adjusted unemployment. Commercial sales are expected to increase 4.5 percent on year after a 3.6 percent annual expansion in July. The unemployment rate is expected to hold at 3.91 percent from the previous month.
Also, Taiwan will ban short selling of 150 of the index heavyweights when they trade below the previous session's closing levels for the two weeks starting Monday, the Financial Supervisory Commission said in a statement late Sunday. The measure will help "maintain the market's order, stability, improve investor confidence, and boost the stock market," the report said. The 150 stocks are the components of the Taiwan 50 Index, Taiwan Mid-Cap 100 Index and the Taiwan Technology Index.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.