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Rally May Stall For Taiwan Stock Market

The Taiwan stock market has finished higher now in five straight sessions, climbing more than 180 points or 2.4 percent in that span. The Taiwan Stock Exchange settled just above the 7,850-point plateau, and now analysts are forecasting little movement at the opening of trade on Friday.

The global forecast for the Asian markets is flat with a hint of weakness, with caution likely ahead of closely-watched non-farm payroll data from the United States later in the day. Other U.S. economic data was mixed, with a bigger than expected rebound by weekly jobless claims and an improvement in business activity in the Chicago area. The European and U.S. markets were mixed but little changed, and the Asian markets are expected to follow that lead.

The TSE finished slightly higher on Thursday as gains from the construction and finance sectors were offset by weakness from the technology shares.

For the day, the index collected 17.04 points or 0.21 percent to finish at the daily high of 7,850.02 after trading as low as 7,800.90 on turnover of 77.13 billion Taiwan dollars.

Among the actives, Crowell Development surged by the 7 percent daily limit, Highwealth Construction spiked 3.55 percent, Fubon Financial Holding jumped 1.48 percent and Mega Financial Holding climbed 1.90 percent, while Advanced Semiconductor Engineering shed 2.85 percent and Siliconware Precision Industries fell 0.64 percent.

The lead from Wall Street suggests mild consolidation as stocks showed a lack of direction on Thursday as traders digested a mixed batch of economic data. Uncertainty ahead of Friday's monthly jobs report also contributed to the lack of conviction among traders.

The Labor Department said initial jobless claims rose to 368,000 in the week ended January 26, an increase of 38,000 from the previous week's unrevised figure of 330,000. Economists had been expecting jobless claims to climb to 350,000 after hitting a five-year low in the previous week.

Helping to offset the negative sentiment, the Institute for Supply Management - Chicago said its Chicago business barometer climbed to 55.6 in January from a revised 50.0 in December, with a reading above 50 indicating growth.

The Commerce Department also reported a substantial increase in personal income in December, although the jump was due in large part to accelerated dividend and bonus payments ahead of the year-end tax increases.

Among individual stocks, Dow Chemical (DOW) was down after reporting adjusted Q4 earnings that missed estimates. Delivery giant UPS (UPS) also fell after reporting weaker than expected fourth quarter earnings and forecasting 2013 earnings below expectations.

The major U.S. averages were slightly lower on Thursday as the NASDAQ edged down 0.18 points or less than 0.1 percent to finish at 3,142.13, while the Dow fell 49.84 points or 0.4 percent to close at 13,860.58 and the S&P 500 slid 3.85 points or 0.3 percent to end at 1,498.11.

In economic news, Taiwan's gross domestic product expanded 3.42 percent year-on-year in the fourth quarter, the Director-General of Budget Accounting and Statistics said on Thursday.

This was faster than a 0.98 percent growth in the third quarter and slightly better than forecast of a 3 percent expansion. The seasonally adjusted GDP increased at an annualized rate of 6 percent compared to an increase of 3.41 percent in the previous quarter.

In 2012 as a whole, the economy expanded 1.25 percent, slower than previous year's 4.07 percent growth.

by RTT Staff Writer

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