RTTNews - The Taiwan stock market turned right back to the downside again on Monday, one session after ending the two-day losing streak in which it had given up nearly 120 points or 1.7 percent. The Taiwan Stock Exchange closed below the 7,060-point plateau, although investors are optimistic for a solid rebound when the market kicks off trade on Tuesday.
The Asian markets can look to considerable optimism in Tuesday's global forecast as a resurgence in commodities and resources is predicted to lead the bourses firmly to the upside. Financials and steel stocks also are expected to provide support. The European and U.S. markets finished with strong gains, and the Asian markets are tipped to follow that lead.
The TSE finished slightly lower on Monday, as weakness among the technology stocks was nearly erased by gains among the property and steel stocks.
For the day, the index retreated 21.00 points or 0.30 percent to close at 7,056.71 after trading between 7,084.59 and 6,986.29. Volume was 5.15 billion shares worth 128.77 billion Taiwan dollars. There were 1,167 decliners and 1,152 gainers, with 158 stocks finishing unchanged.
Among the decliners, HTC dropped 6.99 percent, while Taiwan Semiconductor Manufacturing Co eased 1.02 percent and Advanced Semiconductor Engineering shed 1.69 percent.
Finishing higher, MediaTek rose 0.74 percent, while United Microelectronics Corp added 1.03 percent, Shihlin Paper surged 7 percent, Shihlin Electric and Engineering gained 2.47 percent, Tung Ho Steel jumped 5.44 percent and Chun Yuan Steel added 1.87 percent.
Wall Street offers a broadly positive lead as stocks saw a significant rally on the first trading day of August, fueled by better-than-expected economic data. The major averages all finished in positive territory, with the NASDAQ and the S&P 500 moving past the key technical levels of 2,000 and 1,000, respectively.
Notable buying interest was generated by a report from the Institute for Supply Management that showed a much slower than expected pace of contraction in manufacturing activity in July. The report also showed notable improvements in new orders and production. The ISM said its index of activity in the manufacturing sector rose to 48.9 in July from 44.8 in June, although a reading below 50 indicates a contraction. Economists had been expecting a more modest increase to a reading of 46.5.
Separately, the U.S. Commerce Department revealed that construction spending rose 0.3 percent in June following a revised 0.8 percent slide in May. The figure surprised economists, who had expected a decline of 0.5 percent for the month. The unexpected increase was largely due to a 1.0 percent increase in public construction. While private construction slipped 0.1 percent, residential construction spending was up 0.5 percent.
Some positive sentiment was also generated by news that Ford (F) reported its first increase in U.S. sales in nearly two years in the month of July. Ford said its sales rose 2.3 percent compared to the same month a year ago due in part to the government's Cash for Clunkers program.
In earnings news today, Humana (HUM) and Tyson Foods (TSN) beat Wall Street estimates, while traders are looking forward to the release of results from homebuilding stalwarts Centex (CTX) and Pulte Homes (PHM) after the closing bell this afternoon.
The major averages all closed sharply higher, with the NASDAQ ending the session at its best level of the day. The Dow closed up by 114.95 points or 1.3 percent at 9,286.56, the NASDAQ climbed by 30.11 points or 1.5 percent to 2,008.61, and the S&P 500 rose by 15.15 points or 1.5 percent to 1,002.63. With the gains, the NASDAQ closed above the 2,000 level for the first time since October, while the S&P 500 closed above the 1,000 level for the first time since November. The Dow also set a nine-month closing high.
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