RTTNews - The Taiwan stock market has finished higher now in three straight sessions, gathering more than 320 points or 4.8 percent in the process. The Taiwan Stock Exchange moved back above the 7,000-point plateau, although now analysts are calling for a sharp pullback at the opening of trade on Wednesday.
The global forecast suggests that the Asian markets will open under some pressure, with weakness expected particularly from the financial, property and airline sectors. Commodities also may wilt, thanks to a sharp decline in the price of crude oil. The European and U.S. markets all finished sharply lower, and the Asian bourses also are tipped to move firmly to the downside.
The TSE finished sharply higher on Tuesday, riding strong gains from the technology stocks.
For the day, the index surged 193.80 points or 2.84 percent to finish at 7,019.75 after trading between 6,807.62 and 7,019.75 on turnover of 139.06 billion Taiwan dollars. There were 2,076 gainers and 466 decliners, with 109 stocks finishing unchanged.
Among the gainers, Hon Hai Precision was limit-up 7 percent, while Taiwan Semiconductor Manufacturing Corp added 3.0 percent and United Microelectronics Corp climbed 3.7 percent.
The lead from Wall Street is broadly negative as stocks saw substantial weakness on Tuesday, when traders saw the day's positive economic news as already priced into the market. The major averages all moved sharply lower, adding to the losses posted in the previous session.
This morning, the Institute for Supply Management released a report showing that its manufacturing index jumped to 52.9 in August from 48.9 in July, with a reading above 50 indicating an expansion in the sector. With the increase, the index rose to its highest level since June of 2007. On average, economists had been expecting a more modest increase by the index to a reading of 50.2, which would have still indicated modest growth in the sector.
Separately, pending home sales increased by much more than expected in the month of July, according to a report released by the National Association of Realtors. The report showed that the pending home sales index rose 3.2 percent to 97.6 in July from a reading of 94.6 in June. The increase, which exceeded economist estimates of 1.5 percent growth, lifted the index to its highest level since June of 2007.
Meanwhile, the Commerce Department released a report showing that construction spending fell 0.2 percent in July following a downwardly revised 0.1 percent increase in June. Economists had expected spending to fall 0.2 percent compared to the 0.3 percent increase originally reported for the previous month.
In corporate news, online auction giant eBay (EBAY) announced that it has signed an agreement to sell its Skype communications unit for about $1.9 billion in cash and a $125 million note.
The major averages ended the session firmly in negative territory, just off their worst levels of the day. The Dow fell by 185.68 points or 2 percent to 9,310.60, the NASDAQ declined by 40.17 points or 2 percent to 1,968.89 and the S&P 500 fell by 22.58 points or 2.2 percent to close at 998.04.
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