RTTNews - The Taiwan stock market on Thursday saw an end to the seven-day winning streak in which it had more than 440 points or 5.8 percent in the process. The Taiwan Stock Exchange closed below the 7,000-point level, but analysts are now suggesting a solid surge to the upside by the opening of trade on Friday.
The global forecast for the Asian markets is firmly optimistic, with modest gains predicted for the housing and property sectors. Continued good news on the corporate earnings front is expected to add to the positive sentiment, along with solid economic data out of the United States. The European and U.S. markets finished with significant gains, and the Asian markets are also predicted to open higher.
The TSE finished barely lower on Thursday, as gains among the cement, construction, technology and textile sectors was offset by selling among the financial, food, paper and plastic sectors.
For the day, the index eased 4.44 points or 0.06 percent to close at 6,980.88 after trading between 7,023.67 and 6,926.27. Volume was 5.02 billion shares worth 127.92 billion Taiwan dollars. There were 1,336 decliners and 903 gainers, with 188 stocks finishing unchanged.
Among the gainers, AU Optronics was up 0.39 percent, while TSMC added 2.17 percent, Cathay Financial shed 0.97 percent, Acer was up 0.6 percent, Asustek Computer jumped 3.88 percent and Shin Kong Financial gained 4.23 percent.
The lead from Wall Street is broadly positive as stocks staged a substantial rally following an encouraging report on existing home sales after a modest upward move at the opening bell on Thursday. The major averages all closed in positive territory by substantial margins, with the NASDAQ able to extend its winning streak for the twelfth straight session.
Earlier, buying interest was generated by data from the National Association of Realtors that showed that existing home sales increased for the third consecutive month in June. Existing home sales rose by 3.6 percent to an annual rate of 4.89 million units in June from a downwardly revised rate of 4.72 million in May. Economists had expected sales to rise to a 4.84 million unit rate from the 4.77 million unit rate originally reported for the previous month.
Although a separate report from the Labor Department showed that jobless claims rose in June, the figure rose by slightly less than economists had expected. First-time claims in the week ended July 18th rose to 554,000 from the previous week's revised figure of 524,000. Economists had expected jobless claims to increase to 557,000 from the 522,000 originally reported for the previous week.
Traders also delved into a series of earnings reports, with 3M (MMM), Ford (F) and Wyeth (WYE) reporting results that surpassed Wall Street estimates. McDonald's (MCD), AT&T (T), Qualcomm (QCOM) also beat forecasts, although by more modest margins.
The major averages gave back some ground going into the close, although they held onto standout gains. The Dow closed up by 188.03 points or 2.1 percent at 9,069.29, the NASDAQ advanced by 47.22 points or 2.5 percent to 1.973.60 and the S&P 500 rose by 22.22 points or 2.3 percent to 976.29.
In economic news, industrial production in Taiwan dropped 11.35 percent year-on year in June, after falling a revised 18.42 percent fall in the preceding month, the Department of Statistics, Ministry of Economic Affairs said on Thursday. Economists expected a drop of 16.01 percent. Output has been falling continuously since September last year.
Manufacturing output dropped 11.5 percent annually, while mining and quarrying as also utilities output decreased 12.7 percent and 2.97 percent respectively. On month, output rose 4.96 percent in June, following a 1.63 percent rise in May.
Separately, the statistical office said export orders dropped 10.91 percent year-on-year in
June, slower than economists' expectations of an 18.7 percent fall.
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