One day after ending the two-day winning streak in which it had collected nearly 100 points or 1.2 percent, the Taiwan stock market turned right back to the upside on Wednesday to touch a 16-month closing high. The Taiwan Stock Exchange finished just below the 7,700-point plateau, and now analysts are expecting the market to continue its surge when it kicks off trade on Thursday.
The global forecast for the Asian markets is roundly optimistic, as continued strong earnings point to a resolution sooner rather than later for the global economic slowdown. Commodities are expected to continue to rally on a weakening U.S. dollar, while financials, properties and steel stocks also may provide support. The European and U.S. markets finished firmly higher, and the Asian bourses are tipped to do the same.
The TSE finished sharply higher on Wednesday, thanks to skyrocketing shares from the technology sector - while financials also posted modest gains.
For the day, the index surged 99.15 points or 1.31 percent to finish at 7,695.75 after trading between 7,618.79 and 7,700.42 on turnover of 148 billion Hong Kong dollars.
Among the gainers, TSMC added 2.75 percent, while UMC surged 4.87 percent, Acer gained 1.36, Chinatrust Financial was up 0.93 percent, ProMOS Tech climbed 6.83 percent, Innolux Display gained 3.01 percent and Mediatek Inc added 1.2 percent.
The lead from Wall Street is sharply positive as stocks rose by substantial margins on Wednesday, with the day's news on earnings and economics generating considerable buying interest. The major averages all closed firmly in positive territory, with the Dow closing above 10,000 for the first time in a year.
Semiconductor giant Intel (INTC) boosted market sentiment considerably, reporting third quarter earnings and revenues that topped analyst forecasts while the firm's fourth quarter revenue outlook was also higher than anticipated.
JP Morgan Chase (JPM) also contributed to the pick up in risk appetite this morning, as the financial giant third quarter earnings that rose by much more than analysts had been expecting, although the firm noted that loan losses are likely to remain high.
On the economic front, traders reacted positively to retail sales data from the Commerce Department, with the headline sales figure falling by less than expected despite the end of the government's cash for clunkers program. Excluding auto sales, retail sales actually rose more than expected.
Additionally, the minutes from the latest Federal Reserve meeting showed that the Fed raised its forecast for real GDP growth over the second half of 2009 and over 2010, citing a likely improvement in consumer spending. Nonetheless, the Fed also indicated little concern over near term inflation.
The major averages all saw some upside in late-session dealing, ending the session just off their best levels of the day. The Dow closed up by 144.80 points or 1.5 percent at 10,015.86, the NASDAQ advanced 32.34 points or 1.5 percent to 2,172.23 and the S&P 500 rose by 18.83 points or 1.8 percent to 1,092.02.
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