The Taiwan stock market has closed higher now in four straight trading days, adding more than 300 points or 6 percent in the process. The Taiwan Stock Exchange has closed in positive territory in nine of the last 10 trading days, and it now has cracked resistance at 5,500 points - and now analysts predict that the market can move slightly higher on Monday.
The global forecast for the Asian markets is generally positive, although many of the markets are already riding significant winning streaks and may be due for a downside correction on profit taking. The test launch of a North Korean rocket over the weekend may add to the sense of unease, as does some weak economic data out of the world's largest economy. The U.S. markets finished modestly higher, and the Asian markers are also tipped to move nominally to the upside.
The TSE finished sharply higher on Friday, thanks to significant gains among the financial, cement, food, construction and textile stocks. The gains were tempered by weakness among the paper and plastic sectors.
For the day, the index was up 55.85 points or 1.02 percent to close at 5,529.63 after trading between 5,482.18 and 5,567.15. Volume was 8.53 billion shares worth 161.96 billion Taiwan dollars. Gainers outnumbered losers 1,320 to 699, with 159 stocks remaining unchanged.
The lead from Wall Street is cautiously optimistic as stocks suffered considerable uncertainty throughout most of Friday's session, but ultimately closing higher on the day. The lack of direction seen for much of the day came as traders digested weak employment data along with some positive remarks from Fed Chairman Bernanke.
On the economic front, the Labor Department said that non-farm payroll employment fell by 663,000 jobs in March following an unrevised decrease of 651,000 jobs in February. The drop in jobs came roughly in line with economists' expectations of a decrease of 658,000 levels. With the continued decrease in jobs, the unemployment rate rose to 8.5 percent in March from 8.1 percent in the previous month, in line with expectations. The increase lifted the unemployment rate to its highest level since November of 1983.
Separately, the Institute for Supply Management released its report on activity in the service sector for March, showing that its index of activity in the sector unexpectedly fell to 40.8 in March from 41.6 in February, with a reading below 50 indicating a contraction in the sector.
Meanwhile, Bernanke offered encouraging news, saying that programs enacted by the Federal Reserve to unfreeze the credit markets are working. Bernanke praised the actions of policymakers as having lowered the cost and increased the availability of credit.
In the midst of extraordinarily challenging times for the financial system and economy, Bernanke stated that he is confident that growth will be restored.
Additionally, President Barack Obama delivered a speech in Strasbourg, France, focusing on rebuilding the relationship between Europe and America and noting the need for unity across the Atlantic as nations face terrorist and economic threats. The president said that he plans to lay out a plan in Prague over the weekend that will offer a goal of a world without nuclear weapons.
The major averages had some difficulty sustaining any significant moves for much of the session but showed a notable move to the upside going into the close. The Dow closed up 39.51 points or 0.5 percent at 8,017.59, the Nasdaq closed up 19.24 points or 1.2 percent at 1,621.87 and the S&P 500 closed up 8.12 points or 1 percent at 842.50.
In economic news, Taiwan is on Monday set to announce March numbers for its consumer price index and wholesale price index. Analysts are expecting a decline of between 0.6 and 0.87 percent on year for CPI following the 1.31 percent annual contraction in February. Wholesale prices are seen higher by 2.28 percent on year after the 9.04 percent annual decline in the previous month.
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