RTTNews - The Taiwan stock market has finished lower now in back-to-back sessions, giving away more than 120 points or 1.7 percent along the way. The Taiwan Stock Exchange slid below the 7,000-point plateau, and now investors are expecting the market to remain below that level when it kicks off trade on Wednesday.
The global forecast for the Asian bourses offers little guidance with a flat opening likely in the cards. Financials and properties are expected to extend gains, but they'll likely be countered by profit taking among the oil, steel and retail stocks. The European markets finished modestly in negative territory, while the U.S. markets ended slightly positive - and the Asian markets are also expected to hover around the unchanged line.
The TSE finished sharply lower on Tuesday, shrugging off a solid opening as technology stocks were hit hard by profit takers. Gains among the cement and plastics sectors eased some of the heavier losses.
For the day, the index dropped 100.84 points or 1.43 percent to close at 6,955.87 after trading between 6,921.04 and 7,138.94 on turnover of 159.96 billion Taiwan dollars. There were 1,667 decliners and 805 gainers, with 135 stocks finishing unchanged.
Among the actives, United Microelectronics Corp and HTC both finished limit-down 7 percent, while MediaTek fell 4.63 percent, Taiwan Semiconductor Manufacturing Co lost 1.20 percent, Formosa Plastics added 2.43 percent and Taiwan Cement was up 2.87 percent.
Wall Street offers a barely positive lead as stocks ended Tuesday's trading on a positive note amid some late session buying interest following a choppy session. The major averages all finished in positive territory by moderate margins, building on yesterday's strong gains that helped the NASDAQ and S&P 500 cross key levels.
On the economic front, the National Association of Realtors released a report showing that pending home sales growth in June exceeded economist estimates by a wide margin. With the increase, pending sales rose for the fifth consecutive month. NAR said its pending home sales index jumped 3.6 percent to 94.6 in June from an upwardly revised reading of 91.3 in May. Economists had been expecting a much more modest increase by the index of about 0.7 percent.
Earlier, the Commerce Department released a report showing that personal spending increased by slightly more than expected, while personal income fell by more than expected. The report showed that personal spending rose 0.4 percent in June following a revised 0.1 percent increase in May. Economists had been expecting spending to increase by 0.3 percent compared to the 0.3 percent increase originally reported for the previous month.
At the same time, the Commerce Department said that personal income fell by 1.3 percent in June after increasing by a revised 1.3 percent in the previous month. The decrease compares to economist estimates of a 1.0 percent decline. Subsequently, the report said that personal saving as a percentage of disposable personal income was 4.6 percent in June compared with 6.2 percent in May.
On the earnings front, Centex (CTX) was one of the few bright spots among a slew of disappointing results that included Pulte (PHM), D.R. Horton (DHI), Archer Daniels Midland (ADM) and Tenet Healthcare (THC), among others.
The major averages showed a notable upward move going into the close, climbing back above the unchanged line. The Dow closed up by 33.63 points or 0.4 percent at 9,320.19, the NASDAQ advanced by 2.70 points or 0.1 percent to 2,011.31 and the S&P 500 rose by 3.02 points or 0.3 percent to 1,005.65.
In economic news, Taiwan will on Wednesday announce July data for inflation, wholesale prices and foreign reserves. Inflation is called lower by 2.24 percent on year after the 1.97 percent annual contraction in June. Wholesale prices are predicted to fall 14 percent on year after the 13.62 percent annual decline a month earlier. Foreign reserves are expected to come in at $322.7 billion - up from $317.56 billion in the previous month.
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