RTTNews - The Taiwan stock market finished lower for the second straight session on Thursday following the two-day winning streak in which it had gathered nearly 170 points or 3 percent on its way to a fresh 11-month closing high. The Taiwan Stock Exchange closed above the 7,020-point plateau, although investors are looking for a modest rebound when the market opens for business on Friday.
The global forecast for the Asian markets is broadly positive, with solid gains expected from the financial shares. The continuing rebound among the resources - and the price of oil, in particular - adds to the positive sentiment. Commercial real estate and chemical stocks also are tipped higher. The European and U.S. markets finished firmly in positive territory, and the Asian bourses are tipped to follow suit.
The TSE finished modestly lower on Thursday, dragged to the downside by heavy selling among the financials, technology stocks and plastic shares.
For the day, the index shed 56.52 points or 0.8 percent to close at 7,027.11 after trading between 6,944.50 and 7,068.43.
Among the decliners, Taiwan Semiconductor Manufacturing Co lost 0.88 percent, while Cathay Financial was down 1.17 percent and Fubon Financial shed 0.3 percent.
Wall Street offers a firm lead as stocks posted strong gains on Thursday, fueled by stabilizing earnings and employment figures while respectable results for a seven-year note auction also boosted equities. The major averages all finished the day firmly in positive territory despite some late session profit taking, closing at their best levels of the year.
Early buying interest was generated as traders reacted positively to the latest earnings and economic data, including the Labor Department's report on first-time claims for unemployment benefits in the week ended July 25. While the Labor Department said jobless claims came in above the average analyst estimate, there were some concerns that claims could have come in substantially higher. Further, the four-week moving average fell for the fifth straight week, dropping to its lowest level since January.
The report said that weekly jobless claims rose to 584,000 from the previous week's revised figure of 559,000. Economists had expected jobless claims to rise to 575,000 from the 554,000 originally reported for the previous week. The report also showed that the less volatile four-week moving average fell to 559,000 from the previous week's revised average of 567,250.
Traders also delved into a slew of earnings reports, with Visa (V) reporting adjusted earnings and revenues that beat estimates. Cigna (CI), Tyco (TYC), Kellogg (K) and Master Card (MA) also surpassed expectations on the bottom line, although revenues largely missed the mark. Meanwhile, energy giant Exxon Mobil (XOM) fell well short of earnings forecasts, although its revenues beat expectations.
Equities saw some modest upside after the results of the Treasury Department's $28.0 billion sale of seven-year notes showed that the auction attracted stronger than expected demand. The sale drew a high-yield of 3.369 percent, while the bid-to-cover ratio came in at 2.63. The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.
The major averages ceded considerable ground heading into the close, but they were able to hold onto strong gains. The Dow finished up by 83.74 points or 0.9 percent at 9,154.46, the NASDAQ advanced by 16.54 points or 0.8 percent to 1,984.30 and the S&P 500 rose by 11.60 points or 1.2 percent to 986.75.
On the corporate front, Taiwan Semiconductor Manufacturing Co. (TSMC) reported a 15 percent fall in profit for the second quarter, reflecting mainly double-digit decline in sales. Nonetheless, the company said that both the macroeconomic forecast and booking trends indicate that third quarter will be good.
For the latest quarter, the company's net income attributable to shareholders decreased to NT$24.45 billion or NT$0.94 per share from NT$28.77 billion or NT$1.09 per share in the year-ago quarter. On a US dollar basis, the company posted second-quarter net income attributable to shareholders of $738 million, or $0.03 per share. Net earnings per ADR for the quarter were NT$4.71, or US$0.14, lower than last year's NT$5.47.
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