The Taiwan stock market has finished higher in two of three trading days since ending the four-day winning streak in which it gathered more than 430 points or 8 percent on its way to a fresh seven-month high. The Taiwan Stock Exchange plummeted all the way down through support at 5,800 points, although analysts are predicting a mild recovery at the opening of trade on Monday.
The global forecast for the Asian markets is virtually flat. Corporate earnings are a mixed bag so far as some have come in better than expected - although more of the big financials are due to report this week and could fall under pressure. The European markets finished sharply higher and the U.S. markets ended barely in the green, and the Asian bourses are predicted to fall somewhere in between with modest gains.
The TSE finished sharply lower on Friday, suffering its largest single-day decline since January 15 due to profit taking from the recent winning streak. Paper stocks were the big losers, while construction, food, financial, textile, cement, plastic and machinery stocks also finished with heavy losses.
For the day, the index lost 241.79 points or 4.03 percent to close at 5,755.38 after trading between 6,071.06 and 5,707.69. Volume was 10.44 billion shares worth 223.65 billion Taiwan dollars. There were 1,906 decliners and 433 gainers, with 60 stocks remaining unchanged.
Among the decliners, Shin Kong Financial, Fubon Financial Holding Company and Mega Financial Holding Company all fell by the maximum 7 percent, while Cathay Financial Holding fell 6.05 percent and Nanya Tech lost 6.49 percent. Bucking the trend, UMC rose 3.77 percent and Hon Hai was up 0.45 percent.
Wall Street offers little in the way of guidance with perhaps a touch of upside as stocks ended Friday's trading modestly higher after a relatively lackluster session with traders digesting the latest batch of earnings news. The major averages ended the day just above the unchanged line but still managed close higher for the sixth consecutive week.
Earlier in the day, General Electric (GE) released its first quarter financial results, reporting earnings from continuing operations of $0.26 per share, down from $0.43 per share in the previous year. On average, analysts expected the company to report earnings of $0.21 per share.
Citigroup (C) also released its first quarter results, reporting a loss available to common shareholders that shrank significantly to $0.18 per share from $1.03 per share in the year ago quarter. Analysts expected the company to report a loss of $0.34 per share.
In other corporate news, General Motors (GM) CEO Fritz Henderson said it was more probable that the auto giant would need to seek bankruptcy protection in order to complete its restructuring process, although he noted that isn't the company's preferred option.
Meanwhile, on the economic front, the Reuters/University of Michigan's consumer sentiment index for April rose to 61.9, a substantial increase from the previous reading. Analysts had expected the index to rise to 58.5 from 57.3 in March.
Also, Federal Reserve Chairman Ben Bernanke delivered a speech earlier in the day in which he offered his support to financial innovation, despite the fact that some of these new products have contributed to the current economic crisis. Bernanke argued that increased regulation would be a better response than eliminating innovation. The Fed chief noted that while financial innovation can misfire, more often the benefits outweigh the downside.
The major averages moved to the downside going into the close, ending the day modestly higher. The Dow closed up 5.90 points or 0.1 percent at 8,131.33, the NASDAQ closed up 2.63 points or 0.2 percent at 1,673.07 and the S&P 500 closed up 4.30 points or 0.5 percent at 869.60. Friday's modest gains helped the major averages to post their sixth straight week of gains. While the Dow rose 0.6 percent for the week, the NASDAQ and the S&P 500 posted weekly gains of 1.2 percent and 1.5 percent, respectively.
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