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Taiwan Stocks Unlikely To Sustain Gains

5/6/2012 8:30 PM ET

The Taiwan stock market bounced right back to the upside again on Friday, one session after it had ended the two-day winning streak in which it had surged almost 200 points or 2.8 percent. The Taiwan Stock Exchange finished just below the 7,700-point plateau, although now investors are expected to lock in gains when the market kicks off trade on Monday.

The global forecast for the Asian markets is grim following disappointing employment data from the United States, while Eurozone private sector activity declined in April at the fastest rate since October 2011. In addition, Germany's services sector grew less than expected in April, and the French service sector contracted. Adding to the uncertainty, Francois Hollande was crowned the new President of France beating Nicholas Sarkozy. The European and U.S. markets were down, and the Asian bourses are tipped to follow suit.

The TSE finished modestly higher on Friday following gains from the construction, food, plastic, textile, finance, technology, cement and paper sectors.

For the day, the index gathered 41.42 points or 0.54 percent to finish at 7,700.95 after trading between 7,614.99 and 7,704.87 on turnover of 87.93 billion Taiwan dollars.

Among the actives, Kuoyang Construction surged by the 7 percent daily maximum, HTC spiked 4.31 percent and Largan climbed 1.69 percent, while Taiwan Semiconductor Manufacturing Co. shed 1.46 percent and United Microelectronics Corp. fell 1.93 percent.

The lead from Wall Street is negative as stocks moved sharply lower on Friday as disappointing jobs data generating broad based selling pressure as the Labor Department reported much weaker than expected job growth in April.

Employment increased by 115,000 jobs in April compared to expectations for an increase of about 165,000 jobs. While the Labor Department also said that the unemployment rate edged down to 8.1 percent in April from 8.2 percent in March, the drop was largely due to a decrease in the size of the labor force.

Among individual stocks, shares of Qlogic (QLGC) fell 9.5 percent after the storage-networking technology company reported better than expected fourth quarter earnings but on weaker than expected revenues. Kraft (KFT) also ended the day in the red even though the food giant reported better than expected first quarter results.

Meanwhile, shares of LinkedIn (LNKD) jumped 7.2 percent after the online professional network operator reported first quarter results that exceeded estimates and provided upbeat guidance.

In other news, Facebook set the price range for its initial public offering at $28 to $35 per share. The social networking giant expects the much anticipated IPO to raise up to $13.6 billion and give the company a market value as high as $96 billion.

After moving sharply lower in morning trade, the major averages remained firmly negative throughout the afternoon. The Dow slid 168.32 points or 1.3 percent to finish at 13,038.27, while the NASDAQ plunged 67.96 points or 2.3 percent to end at 2,956.34 and the S&P 500 fell 22.47 points or 1.6 percent to 1,369.10. The losses resulted in steep losses for the week. The Dow fell by 1.4 percent, while the NASDAQ tumbled by 3.7 percent and the S&P 500 dropped by 2.4 percent.

by RTT Staff Writer

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