RTTNews - The Taiwan stock market lost barely a point on Wednesday, but that was enough to extend its losing streak to three sessions - costing it more than 280 points or 4 percent in the process. The Taiwan Stock Exchange remained below support at the 6,790-point plateau, although now investors are looking for the market to stop the bleeding when it kicks off trade on Thursday.
The global forecast for the Asian markets is cautiously optimistic, with bourses likely to rebound modestly after sharp declines throughout much of the region in the previous session. The markets are likely to see strength in the oil and commodity stocks, as well as the pharmaceutical shares - while those gains may be offset by selling in the airline and property sectors. The European markets finished close to the unchanged line on either side, while the U.S. markets ended modestly higher - and the Asian bourses are forecast also to open slightly to the upside.
The TSE finished virtually flat on Wednesday, as losses among the cement, textiles, paper and financials were offset by gains in the food and technology sectors.
For the day, the index eased 1.19 points or 0.01 percent to close at 6,788.58 after trading between 6,854.59 and 6,788.58. Volume was 2.66 billion shares worth 70.56 billion Taiwan dollars. There were 1,103 gainers and 970 decliners, with 261 stocks finishing unchanged.
Among the actives, clothing maker Les Enphants Co was limit-up and Taiwan Semiconductor Manufacturing Co added 0.34 percent.
The lead from Wall Street is modestly positive as stocks were able to recover from early weakness and finished notably higher on Wednesday, largely driven by a report indicating a jump in oil demand. The major averages all closed in positive territory by solid margins, further offsetting Monday's losses.
With no significant news on the economic front, the day's crude oil inventories report received extra attention. Inventories unexpectedly fell in the week ended August 14, according to data released this morning by the Energy Information Administration.
Oil prices surged above $70 a barrel after the report was made public, resulting in significant strength among oil-related stocks, which largely spearheaded today's rally. Crude for September delivery eventually closed up $3.23 at $72.42 a barrel.
The EIA said crude oil inventories decreased by 8.4 million barrels, while analysts expected to see an increase of about 1.1 million barrels for the week. At 343.6 million barrels, however, crude oil inventories remain above the upper boundary of the average range for this time of year.
Earlier, traders reacted to the latest set of corporate quarterly results, with Hewlett-Packard (HPQ) reporting third quarter earnings of $0.91 per share after the closing bell Tuesday, beating the consensus estimate of $0.90 per share. The company expects to report fourth quarter earnings of $1.12 per share compared to the forecast of $1.07 per share.
Deere & Co. (DE) reported third-quarter net income of $0.99 per share, compared with $1.32 per share in the same period last year. The results topped Wall Street estimates of $0.57 per share. Looking forward, Deere said it expects full year net income of $1.1 billion despite expectations for the largest single-year sales decline in at least 50 years.
BJ's Wholesale Club (BJ) reported second quarter net income of $0.64 per share, compared to $0.61 per share in the prior year quarter. Analysts had expected the firm to earn $0.62 per share.
In other news, Ellen Hughes-Cromwick, chief economist of Ford Motor Co. (F), was quoted as saying that economic indicators in the U.S are showing that a recovery is already underway and that auto sales seem to be stabilizing. Hughes-Cromwick also predicted that Ford would see an improvement in sales in 2010.
The major averages saw choppy movement in late-session dealing, finishing near their best levels of the day. The Dow closed up by 61.22 points or 0.7 percent at 9,279.16, the NASDAQ climbed by 13.32 points or 0.7 percent to 1,969.24 and the S&P 500 rose by 6.79 points or 0.7 percent to 996.46.
In economic news, Taiwan is scheduled to release gross domestic product and current account data for the second quarter of 2009 on Thursday afternoon. GDP is expected to contract 7.8 percent on year following the 10.24 percent annual decline in the previous three months. Current account is expected to show a surplus of $9.35 billion following the $12.991 billion surplus in the first quarter.
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