RTTNews - The Taiwan stock market has finished lower now in three straight sessions, shedding more than 220 points or 3.3 percent in the process. The Taiwan Stock Exchange crashed below the 6,850-point plateau, and now investors are bracing for further declines when the market opens for business on Thursday.
The global forecast could signal selling pressure for the Asian markets, thanks largely to continued profit taking for several of the key bourses following sharp advances last week. Oil, health insurance and telecommunication shares are expected to see additional pressure, with some support coming from bargain hunting among the financials and the properties. The European markets finished firmly in negative territory, while the U.S. bourses ended slightly in the red - and the Asian markets also are tipped to head to the downside.
The TSE finished sharply lower on Wednesday, thanks to heavy selling pressure among the construction, financial and paper sectors. Food stocks also ended lower, as did technology, textile and plastic shares.
For the day, the index lost 107.63 points or 1.54 percent to close at 6,848.24 after trading between 7,013.6 and 6,827.16. Volume was 4.98 billion shares worth 145.28 billion Taiwan dollars. There were 1,880 decliners and 586 gainers, with 107 stocks finishing unchanged. Chinatrust Financial led the decliners with a 5.52 percent fall.
The lead from Wall Street is mildly negative as stocks finished Wednesday's session moderately lower after disappointing data on the health of the service sector and the labor market generated some selling pressure. The major averages all closed in negative territory, offsetting some of their recent gains.
Prompting some negative sentiment in the markets was a report from the Institute for Supply Management on activity in the service sector in the month of July, which showed that the pace of contraction in the sector unexpectedly accelerated from the previous month. The ISM said its index of activity in the sector edged down to 46.4 in July from 47.0 in June, with a reading below 50 indicating a contraction in the sector. The decrease came as a surprise to economists, who had expected the index to rise to 48.0.
A separate report released by payroll processor Automatic Data Processing (ADP) showed that private sector employment saw another notable decline in the month of July, although the pace of job losses slowed to its slowest rate since October of 2008. ADP said non-farm private employment fell by 371,000 jobs in July following a revised decrease of 463,000 jobs in June. Economists had been expecting a decrease of about 350,000 jobs compared to the loss of 473,000 jobs originally reported for the previous month.
Meanwhile, the U.S. Commerce Department revealed that factory orders rose 0.4 percent in June, surprising economists, who had expected orders to drop 0.8 percent.
On the earnings front, traders reacted to a mixed bag of earnings, with Procter & Gamble (PG), Kraft Foods (KFT), Ralph Lauren (RL) and Electronic Arts (ERTS) largely beating bottom line estimates while falling short on the revenue front.
The major averages saw a late session recovery attempt fizzle, leading to a negative finish. The Dow closed down by 39.22 points or 0.4 percent at 9,280.97, the NASDAQ slipped by 18.26 points or 0.9 percent to 1,993.05 and the S&P 500 fell by 2.93 points or 0.3 percent to 1,002.72.
In economic news, Taiwan's consumer prices fell 2.33 percent year-on-year in July after a 1.97 percent drop in June, the Directorate General of Budget, Accounting and Statistics said on Wednesday - worse than economist expectations of a 2.24 percent fall. Compared with the previous month, consumer prices rose 0.19 percent in July, following a 0.1 percent drop in the preceding month.
The wholesale prices dipped 14.11 percent year-on-year in July, slightly more than economists' expectations of a 14 percent fall. On month, the wholesale prices rose 1.05 percent.
Meanwhile, export prices fell 9.52 percent from last year, but increased 0.93 percent from the previous month. Import prices declined 15.98 percent on a yearly basis but were up 0.89 percent on a monthly basis.
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