The Taiwan stock market has alternated between positive and negative finishes through the last six trading days, since the end of the two-day losing streak in which it had given away almost 140 points or 2 percent. The Taiwan Stock Exchange finished just above the 6,635-point plateau, and now investors are expected to remain cautious when the market kicks off trade on Tuesday.
The global forecast for the Asian markets remains soft thanks to lingering European debt concerns and the uncertainty following the death of North Korean dictator Kim Jong Il. Financials figure to lead the markets lower, along with steel, airline, oil and gold stocks. The European markets finished mostly lower and the U.S. bourses ended firmly in the red - and the Asian markets are also expected to open lower.
The TSE finished sharply lower on Monday following losses from the construction, paper, finance, textile, technology, cement, plastics and food sectors.
For the day, the index plunged 151.76 points or 2.23 percent to finish at 6,633.33 after trading between 6,609.11 and 6,780.64 on turnover of 61.81 billion Taiwan dollars.
The lead from Wall Street is broadly negative as stocks turned lower on Monday and saw further downside late in the day, ending the session firmly in negative territory. Lingering concerns about the European debt crisis weighed on the markets once again.
Remarks by European Central Bank President Mario Draghi generated considerable selling pressure and contributed to the subsequent pullback by the markets. While Draghi told the European Parliament's economic and monetary affairs committee that he had no doubt about the strength of the euro, his remarks suggested that the ECB is not likely to step up Eurozone bond purchases.
Concerns about instability in Asia following the Kim's death also contributed to the weakness that emerged on Wall Street. Kim died of a heart attack on Saturday morning while on a train journey outside the country's capital, North Korean state television reported.
Traders also kept an eye on Washington, where lawmakers continue to struggle to reach an agreement on extending the payroll tax cuts that are due to expire at the end of the year. The Senate approved a two-month extension of the tax cuts over the weekend, but members of the House have expressed significant opposition to a temporary extension.
Stocks saw further downside in late-day trading in reaction to a report from Dow Jones indicating that European finance ministers failed to reach an agreement on raising the joint ceiling for the European Stability Mechanism and European Financial Stability Facility.
The major averages edged up off their worst levels going into the close but still posted steep losses on the day. The Dow fell 100.13 points or 0.8 percent to 11,766.26, the NASDAQ tumbled 32.19 points or 1.3 percent to 2,523.14 and the S&P 500 slid 14.31 points or 1.2 percent to 1,205.35.
In economic news, Taiwan will on Tuesday provide November figures for export orders, with analysts expecting an increase of 2.0 percent on year following the 4.38 percent annual expansion in October.
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