Asian Economic News
Taiwan Shares May Ease Under Pressure
10/26/2009 8:16 PM ET
(RTTNews) -
The Taiwan stock market moved back to the upside again on Monday one session after it had halted the two-day winning streak in which it had lost nearly 150 points or 1.8 percent along the way. The Taiwan Stock Exchange finished just shy of the 7,670-point plateau, but now analysts are forecasting a modest retreat when the market opens for business on Tuesday.
The global forecast for the Asian markets is firmly negative, with weakness expected from the commodities following a noteworthy decline in prices. Gold miners could be hit especially hard, while financials and properties also are likely to decline. The European and U.S. markets finished solidly in the red, and the Asian bourses are also expected to track to the downside.
The TSE finished slightly higher on Monday, as gains among the plastic, cement, financial, food and paper sectors were largely erased by selling pressure among the construction, textile and technology shares.
For the day, the index added 19.12 points or 0.24 percent to finish at 7,668.40 after trading between 7,751.68 and 7,658.22. Volume was 3.76 billion shares worth 105.40 billion Taiwan dollars. There were 1,570 decliners and 977 gainers, with 22 stocks finishing unchanged.
Among the actives, Cathay Financial added 0.17 percent and Fubon Financial was up 0.89 percent, while Taiwan Semiconductor Manufacturing Co was flat. HTC shed 1.82 percent and MediaTek fell 1.79 percent.
Wall Street offers a sharply pessimistic lead as stocks saw steep losses on Monday, giving up early gains amid a considerable pullback in the financial and commodity sectors. The major averages all closed firmly in negative territory, backing further away from one-year highs set earlier this month. The early strength in the markets came as traders reacted positively to the latest batch of earnings news, including better than expected earnings from Verizon (VZ) and Corning (GLW).
Trader sentiment was also boosted by optimism about the third quarter GDP report due to be released later this week. Economists estimate that the economy expanded by 3.2 percent after contracting in each of the four previous quarters.
Nonetheless, weakness among financial stocks limited the upside for the markets, and a sharp pullback by commodities prices contributed to a substantial downturn by the major averages in late morning trading.
The weakness in the financial sector came following some negative analyst comments, with Fifth Third Bancorp (FITB) and SunTrust (STI) posting notable losses after Rochdale Securities analyst Dick Bove recommended selling the stocks.
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