RTTNews - Ahead of Friday's unscheduled day off in response to Typhoon Morakot, the Taiwan stock market had halted the three-day losing streak in which it had lost more than 220 points or 3.3 percent. The Taiwan Stock Exchange closed above the 6,860-point plateau, and now analysts say that the market is due for a solid surge to the upside at the opening of trade on Monday - possibly reclaiming the 7,000-point level.
The global forecast for the Asian markets is optimistic, fueled by better than expected economic data out of the United States. Properties and retail stocks are tipped to move higher, although some of the gains may be capped by profit taking among the commodities following last week's run-up. The European and U.S. markets finished firmly in positive territory, and the Asian bourses are also projected to move higher.
The TSE finished slightly higher on Thursday, thanks to gains among the financial, technology and plastic sectors - although the gains were offset by weakness among the construction, food, textile and paper stocks.
For the day, the index added 20.41 points or 0.29 percent to close at 6,868.65 after trading between 6,775.87 and 6,888.09. Volume was 5.08 billion shares worth 121.43 billion Taiwan dollars. There were 1,364 decliners and 980 gainers, with 163 stocks finishing unchanged.
Wall Street offers a broadly positive lead as stocks saw a notable rally on Friday, fueled by the day's encouraging economic data. The major averages all finished in positive territory by notable margins, offsetting some of the losses posted earlier in the week.
Buying interest in stocks was sparked by a Labor Department report showing that the pace of job losses slowed by even more than economists had been anticipating in the month of July. The report showed that non-farm payroll employment fell by 247,000 jobs in July following a revised decrease of 443,000 jobs in June. Economists had been expecting employment to fall by 325,000 jobs compared to the drop of 467,000 jobs originally reported for the previous month.
Additionally, the Labor Department said that the unemployment rate unexpectedly edged down to 9.4 percent in July from 9.5 percent in June. With the decrease, the unemployment rate fell for the first time since April of 2008.
On the earnings front, American International Group (AIG) and Fannie Mae (FNM) saw mixed reaction to their quarterly results as the firms are lingering in the shadow of receiving government bailout funds last fall.
Meanwhile, Hansen Natural Corp. (HANS), Nvidia (NVDA) and AES Corp. (AES) largely beat estimates. Generally, companies have been able to surpass expectations on the bottom line via cost cutting, as revenue growth was limited by the recent economic conditions.
The major averages ceded some ground in late session trading but still finished with strong gains. The Dow closed up by 113.81 points or 1.2 percent at 9,370.07, the NASDAQ climbed by 27.09 points or 1.4 percent to 2,000.25, and the S&P 500 rose by 13.40 points or 1.3 percent to 1,010.48. With the gains, the major averages all closed higher for the week, marking the fourth consecutive week of gains. The Dow and the S&P 500 posted weekly gains of 2.2 percent and 2.3 percent, respectively, while the NASDAQ rose by a more modest 1.1 percent for the week.
In economic news, Taiwan's exports fell 24.4 percent year-on-year to $17.27 billion in July, the Ministry of Finance said on Friday. Economists' had forecast a decline of 21.7 percent in July after a fall of 30.4 percent in June. Exports has been falling since September 2008.
On the other hand, imports dropped 34.1 percent to $15.24 billion after a 33.5 percent decline in June and more than the expected fall of 29 percent. Imports dropped for the tenth month in a row. The trade balance was surplus of $2.03 billion in July, up from $1.76 billion surplus in June.
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