The Taiwan stock market has finished higher in two of four 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 remained below the 5,800-point plateau, although investors are bracing for heavy losses at the opening of trade on Tuesday.
The global forecast for the Asian markets is sharply negative after disturbing earnings news from Bank of America, which is expected to put financial stocks under heavy pressure throughout the region. The price of crude oil also plummeted overnight, which could put the heat on many of the resource stocks. The European and U.S. markets all suffered heavy losses across the board, and the Asian bourses are expecting a similar fate.
The TSE finished modestly higher on Monday, as bargain hunting in the afternoon erased significant losses from the morning session. Technology stocks and financials finished higher, as did tourism stocks.
For the day, the index gained 26.28 points or 0.46 percent to close at 5,781.66 after trading between 5,648.10 and 5,797.63 on turnover of 121.46 billion Taiwan dollars. There were 1,480 decliners and 734 gainers, with 102 stocks finishing unchanged.
Among the gainers, MediaTek added 2.73 percent, while PixArt Imaging gained 6.91 percent, HTC rose 1.92 percent, Taiwan Semiconductor Manufacturing Co rose 2.98 percent, United Microelectronics Corp fell 0.81 percent, Cathay Financial added 3.08 percent, Chinatrust Financial gained 2.28 percent, China Development Financial rose 1.77 percent, Formosa International Hotels rose 3.32 percent and Ambassador Hotel added 3.67 percent.
The lead from Wall Street is broadly pessimistic as stocks moved sharply lower over the course of the trading day on Monday, with the major averages giving back some ground after closing higher for six straight weeks. A negative reaction to the latest earnings news inspired traders to do some profit taking.
Bank of America released its first-quarter results before the market open. While the company posted a better earnings figure than analysts had expected, a significant increase in loan loss protection made investors wary of holding onto the stock.
On the economic front, the Conference Board said its leading economic index fell 0.3 percent in March following a revised 0.2 percent decrease in February. The agency noted that the index has not risen in the past nine months.
In merger news, Sun Microsystems (JAVA) agreed to be acquired by Oracle (ORCL) for $9.50 per share in cash. The offer represents a 42 percent premium to Sun's closing price on Friday. Oracle expects the acquisition to be accretive to its earnings by at least $0.15 per share on a non-GAAP basis in the first full year after closing.
Additionally, Pepsi Bottling Group (PBG) and PepsiAmericas (PAS) showed strong upward moves after PepsiCo (PEP) offered to acquire both bottlers for about $6 billion.
Also, with the price of crude oil showing a steep decline, closing down $4.45 at $45.88 a barrel, the oil services sector saw substantial weakness. Reflecting the weakness in the sector, the Philadelphia Oil Services Index closed down 6.7 percent.
The major averages saw some further downside in the latter part of the trading day, ending the session near their worst levels of the day. The Dow closed down 289.60 points or 3.6 percent at 7,841.73, the NASDAQ closed down 64.86 points or 3.9 at 1,608.21 and the S&P 500 closed down 37.21 points or 4.3 percent at 832.39.
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