The Taiwan stock market has closed higher in two of three trading days since the end of the two-day losing streak in which it had fallen more than 105 points or 1.5 percent. The Taiwan Stock Exchange finished just above the 7,355-point plateau, although now analysts are forecasting renewed selling pressure at the opening of trade on Friday.
The global forecast for the Asian markets suggests consolidation thanks to expanding concerns from Europe and soft U.S. economic data. Fitch Ratings downgraded Greece's long-term debt ratings to CCC from B-, citing the heightened risk that Greece may not be able to sustain its membership in the eurozone. That was coupled with a run on Spanish banks after that country officially slipped back into recession. The European and U.S. markets finished sharply lower, and the Asian markets are expected to open in the red.
The TSE finished sharply higher on Thursday following support from the technology, finance, cement, plastic, construction, food and paper sectors.
For the day, the index surged 122.20 points or 1.68 percent to finish at 7,356.77 after trading between 7,274.32 and 7,356.77 on turnover of 77.86 billion Taiwan dollars.
Among the gainers, Chimei Innolux surged by the 7 percent daily maximum, while Hon Hai Precision climbed 3.50 percent, Taiwan Semiconductor Manufacturing Co. jumped 2.04 percent, Fubon Financial added 2.58 percent and Mega Financial collected 2.62 percent.
The lead from Wall Street continues to be negative as stocks saw substantial weakness on Thursday, with traders reacted negatively to disappointing U.S. economic data. Lingering concerns about the financial situation in Europe also weighed on the markets.
The sell-off followed a report from the Philadelphia Federal Reserve showing an unexpected contraction in regional manufacturing activity in May as its diffusion index of current activity tumbled to a negative 5.8 from a positive 8.5 in April, with a negative reading indicating a contraction in regional manufacturing activity. The drop surprised economists, who had expected a reading of 10.0.
Adding to the negative sentiment, the Conference Board reported an unexpected drop by its leading economic indicators index, which edged down by 0.1 percent in April following a 0.3 percent increase in March. Economists had expected the index to inch up by 0.1 percent.
Also, the Labor Department reported that initial jobless claims unexpectedly came in unchanged in the week ended May 12. Jobless claims came in at 370,000, unchanged from the previous week's revised figure. Economists had expected 365,000 versus the 367,000 originally reported for the previous week.
In corporate news, Wal-Mart (WMT) bucked the downtrend by the broader markets after the retail giant reported better than expected first quarter results. The company also forecast second quarter earnings in line with estimates.
The major U.S. averages were sharply lower on Thursday as the Dow fell 156.06 points or 1.2 percent to finish at 12,442.49, while the NASDAQ plummeted 60.35 points or 2.1 percent to end at 2,813.69 and the S&P 500 dropped 19.94 points or 1.5 percent to 1,304.86. With the losses, the major averages extended a month-long downward move. The Dow and the S&P 500 hit four-month closing lows, while the NASDAQ fell to its lowest closing level in well over three months.
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