RTTNews - The Taiwan stock market on Tuesday snapped the two-day losing streak in which it had lost nearly 18 points or 0.35 percent along the way. The Taiwan Stock Exchange broke through resistance at 6,700 points, although investors are bracing for the market to hand it right back at the opening of trade on Wednesday, following the rest of the region to the downside.

The global forecast for the Asian markets is laced with pessimism as investors are likely to be cautious ahead of the opening of corporate reporting season for the second quarter. A steady decline in commodities for the fifth straight day also is expected to weigh on investors. The European and U.S. markets finished sharply lower, and the Asian bourses are tipped to follow that lead.

The TSE finished modestly higher on Tuesday, thanks to gains among the technology, cement, financial, construction and textile sectors. Losses among the paper and food stocks limited the upside.

For the day, the index jumped 65.31 points or 0.98 percent to close at 6,715.22 after trading between 6,656.89 and 6,745.31. Volume was 4.52 billion shares worth 127.74 billion Taiwan dollars. There were 1,447 gainers and 797 decliners, with 159 stocks finishing unchanged.

Among the gainers, MediaTek rose 5.06 percent, while HTC Corp jumped 3.25 percent, Taiwan Semiconductor Manufacturing Co was up 1.84 percent, Epistar added 4.41 percent, Formosa Epixtaxy jumped 6.87 percent, AU Optronics gained 0.59 percent and China Development Financial surged 5.73 percent.

The lead from Wall Street is broadly negative as stock finished sharply lower on Tuesday, with traders doing some profit taking on the day amid a lack of significant economic data to drive trading. The major averages all closed lower by considerable margins, with the sell off accelerating late in the session. Cashing in on recent gains, traders braced for what is expected to be a dreary earnings reporting season, with aluminum producer Alcoa (AA) set to report after the close of trading on Wednesday.

Aside from the earnings data on tap for the second half of the week, traders are also looking ahead to a series of economic reports on employment, international trade and consumer sentiment, with expectations deflated following disheartening employment data last week.

Earlier today, the results of the Treasury's auction of $35 billion worth of three-year notes cooled investor anxiety in regards to rising interest rates amid the recessionary economic conditions. The sale drew a high-yield of 1.519 percent and attracted moderately strong demand, with the bid-to-cover ratio coming in at 2.62. The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

Monday, an auction of 10-year Treasury Inflation Protect Securities, or TIPS, drew a yield of 1.92 percent and a bid-to-cover ratio of 2.51, its highest in nine years. Traders will also look the Treasury's sale of $19 billion worth standard ten-year notes on Wednesday. The results of the standard ten-year auction and the sale of TIPS will be closely watched by investors, who will compare the yields to gauge the prospect of near-term inflation.

The government has continued to sell bonds in record amounts to fund its accelerated stimulus spending, while recent comments from the Obama administration have led to rampant speculation regarding a second stimulus package.

The major averages all finished lower, seeing further downside in late day trading. The Dow fell 161.27 points or 1.9 percent to 8,163.60, the NASDAQ closed down 41.23 points or 2.3 percent at 1,746.17, while the S&P 500 dropped by 17.69 or 2 percent at 881.03.

In economic news, Taiwan's total exports dropped 30.4 percent year-on-year to USD 16.95 billion in June, while imports fell 33.5 percent to USD 15.18 billion, the Ministry of Finance said on Tuesday. Meanwhile, economists had forecast a 30.8 percent drop in exports and a 38.6 percent decline in imports. Exports fell for the tenth consecutive month. The trade balance was a surplus of USD 1.76 billion in June.

Reflecting prevailing weakness in global demand, exports to Mainland China and Hong Kong decreased 30.2 percent from the previous year and that to the U.S. fell 29 percent. Shipments to Japan fell 18.6 percent and that to Europe dropped 38.5 percent.

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