RTTNews - The losing streak has hit three sessions now for the Taiwan stock market, which has shed more than 170 points or 2.5 percent along the way. The Taiwan Stock Exchange has fallen below 6,800 points, but now analysts predict that the market may see a modest recovery at the opening of trade on Friday - perhaps recovering that former level of support.
The global forecast for the Asian markets is positive following U.S. President Barack Obama's historic speech in Egypt aimed at mending ties with the Muslim world. Some better than expected economic data out of the U.S. adds to the positive sentiment. The European markets finished mixed with a touch of upside, while the U.S. markets ended firmly in positive territory - and the Asian markets are forecast to move higher as well.
The TSE finished sharply lower on Thursday, dragged to the downside by losses among the financial, textile, plastic, technology, cement and food sectors. The construction and paper stocks wound up higher.
For the day, the index dropped 107.08 points or 1.55 percent to close at 6,786.06 after trading between 6,907.87 and 6,716.33. Volume was 5.7 billion shares worth 159.01 billion Taiwan dollars. There were 1,368 decliners and 820 gainers, with 111 stocks finishing unchanged.
Among the decliners, China Metals and Price Housing were both limit-down 7 percent, while Hon Hai Precision fell 4.4 percent, Taiwan Semiconductor Manufacturing Co. fell 3.2 percent and United Microelectronics Corp. dropped 2.99 percent. Bucking the trend, Chunghwa Telecom rose 0.8 percent to 63.80.
The lead from Wall Street is optimistic as stocks resumed their upward move on Thursday following a modest pullback in the previous session. The major averages firmed their position in positive territory in mid-afternoon trading after an uncertain start to the day's session, posting strong gains on the day.
Ahead of the start of trading, traders were presented with employment data from the Labor Department that showed a decrease in first time jobless claims for the week ended May 30. The report also indicated the first decrease in continuing claims in 20 weeks as initial jobless claims fell to 621,000 from the previous week's revised figure of 625,000. Economists had been expecting jobless claims to edge down to 620,000 from the 623,000 originally reported for the previous week.
Continuing claims fell to 6.735 million in the week ended May 23 from the preceding week's revised level of 6.750 million. The modest decrease in continuing claims breaks a recent streak of record highs and marks the first decrease since the week ended January 3.
In a separate report, the Labor Department revised its labor productivity figures for the first quarter, revealing a mild increase in the pace of growth. The report also showed that unit labor costs increased by less than previously estimated.
On the corporate front, membership warehouse operator Costco Wholesale (COST) reported a 7 percent drop in its comparable sales for the four-week period ended May 31 with a 5 percent decline in net sales. A number of other retailers also reported their monthly sales results, with Abercrombie & Fitch (ANF), J.C. Penney (JCP), Bon-Ton (BONT) and American Apparel (APP) all reporting declining sales on a comparable store basis.
Retail giant Wal-Mart (WMT) did not release its monthly sales results, however, as the company announced last month that it would cease providing its monthly results.
The upward move seen over the course of the trading day came as traders shrugged off some uncertainty ahead of Friday's report from the Labor Department detailing the employment situation for the month of May.
The major averages saw further upside in late session trading and closed just off of their best levels of the day. The Dow climbed 74.96 points or 0.9 percent to 8,750.24, the NASDAQ finished up 24.10 points or 1.3 percent at 1,850.02 and the S&P 500 closed up 10.70 points or 1.1 percent at 942.46.
In economic news, Taiwan will on Friday release May data for inflation, WPI and foreign reserves. Inflation is forecast at minus-0.31 percent on year after the 0.45 percent annual contraction in April. Wholesale prices are forecast to fall 12.5 percent on year after the 10.99 percent annual decline in the previous month. Foreign reserves are seen at $301.56 billion after coming in at $304.66 billion a month earlier.
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