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Taiwan Bourse May Test Support At 7,100 Points

The Taiwan stock market headed south again on Thursday, one session after it had snapped the two-day slide in which it had fallen almost 160 points or 2.3 percent. The Taiwan Stock Exchange ended just below the 7,145-point plateau, and now traders are bracing for more losses when the market kicks off trade on Friday.

The global forecast for the Asian markets remains soft on weak economic data from and Europe and the United States - although bargain hunting may protect some of the more oversold bourses. The Eurozone slipped into recession in the third quarter, despite increases in both Germany and France. A jump in U.S. weekly jobless claims also weighed on investors, as did the sharp decline in the Philly Fed index. The impending fiscal cliff in the U.S. also remains a concern. The European and U.S. markets were down again on Thursday, and the Asian markets figure to open in similar fashion.

The TSE finished modestly lower on Thursday as losses from the plastic, finance, cement and paper stocks were offset by gains from the food, textile and technology sectors. Construction stocks were largely flat.

For the day, the index shed 15.91 points or 0.22 percent to finish at 7,143.84 after trading between 7,066.28 and 7,158.74 on turnover of 57.77 billion Taiwan dollars.

Among the actives, Formosa Plastics plunged 3.29 percent and Nan Ya Plastics plummeted 3.10 percent, while Largan Precision jumped 1.02 percent and HTC climbed 1.50 percent.

The lead from Wall Street suggests continued consolidation as stocks turned in a lackluster performance on Thursday before ending modestly lower. The weakness came as traders digested a batch of disappointing U.S. economic data that largely reflected distortions due to the major disruptions caused by Hurricane Sandy.

The Labor Department said jobless claims jumped to 439,000 in the week ended November 10, an increase of 78,000 from the previous week's revised figure of 361,000. Economists had expected jobless claims to climb to 376,000. The increase lifted jobless claims to their highest level since 464,000 in the week ended April 30, 2010.

However, the data was distorted by the impact of Hurricane Sandy, with several states in the mid-Atlantic and Northeast regions reporting large increases due to the storm. The New York and Philadelphia Federal Reserves also released separate reports showing contractions in regional manufacturing activity in November.

A negative reaction to quarterly results from Wal-Mart (WMT) also weighed on investor sentiment, with the retail giant falling by 3.6 percent. While Wal-Mart reported third quarter earnings that came in above analyst estimates, the company also reported sales that came in below expectations.

The continued weakness among stocks also reflected lingering concerns about the looming fiscal cliff as well as worries about escalating violence in the Gaza Strip.

The major U.S. averages were down on Thursday as the Dow dipped 28.57 points or 0.2 percent to finish at 12,542.38, while the NASDAQ fell 9.87 points or 0.4 percent to end at 2,836.94 and the S&P 500 edged down 2.17 points or 0.2 percent to close at 1,353.32. With the losses, the Dow and the NASDAQ fell to their lowest closing levels since June, while the S&P hit its lowest closing level in over three months.

by RTTNews Staff Writer

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