RTTNews - The Taiwan stock market on Wednesday saw an end to the three-day winning streak that saw it gather more than 55 points or 0.8 percent. The Taiwan Stock Exchange slid just below the 6,900-point plateau, but now analysts are forecasting a solid opening to recapture that level when the market kicks off trade on Thursday.
The global forecast for the Asian markets is firmly positive, thanks largely to encouraging commentary from the U.S. Federal Reserve after it decided to keep interest rates on hold. Housing and airline stocks are primed for a rebound in Thursday's trade, along with steel and telecom shares. The European and U.S. markets all finished with solid gains, and the Asian bourses also are expected to track higher on Thursday.
The TSE finished slightly lower on Wednesday, as heavy losses among the construction stocks were largely offset by gains among the technology and food sectors.
For the day, the index eased 10.12 points or 0.15 percent to close at 6,898.90 after trading between 6,864.91 and 6,933.51 on turnover of 103.26 billion Taiwan dollars. There were 1,226 gainers and 1,078 decliners, with 191 stocks finishing unchanged.
Among the gainers, Uni-President Enterprises added 3.50 percent, while AU Optronics rose 5.60 percent, Chi Mei Optoelectronics was up 2.50 percent, Taiwan Semiconductor Manufacturing Co was up 0.70 percent and United Microelectronics Corp added 1.79 percent. Finishing lower, Farglory Land Development shed 2.70 percent and Shining Building Business was down 2.20 percent.
The lead from Wall Street is broadly optimistic as stocks saw a strong outing on Wednesday, with trader expectations largely confirmed by the Federal Reserve. The major averages all closed in positive territory by substantial margins, posting their first positive session of the week after the previous two days were slowed by profit taking.
The Federal Open Market Committee, the policy-making arm of the Federal Reserve, announced Wednesday that it was maintaining the target range for its benchmark federal funds rate at zero to 0.25 percent. The Fed also repeated its belief that low rates will persist for what it calls an extended period. The central bank added that economic activity is leveling out.
The central bank also said it will gradually slow the pace of treasury purchases and expects that the full amount of $300 billion will be purchased by the end of October. Going into the meeting, the Fed was universally expected to leave rates unchanged, but there was some speculation that the central bank could announce the end of its program to buy treasury bonds, a move it had undertaken to further stimulate the economy.
Earlier, traders largely shrugged off a report from the Commerce Department showing that the U.S. trade deficit widened in the month of June compared to the previous month. The deficit for the month still came in narrower than economists had been anticipating. The report revealed that the trade deficit widened to $27.0 billion in June from $26.0 billion in May, with imports increasing at a faster pace than exports. Economists had been expecting a somewhat more significant increase in the size of the deficit to $28.7 billion.
The major averages saw a late session rally stall but still finished with notable gains. The Dow jumped by 120.16 points or 1.3 percent to 9,361.61, the NASDAQ climbed by 28.99 points or 1.5 percent to 1,998.72 and the S&P 500 rose by 11.46 points or 1.2 percent to 1,005.81.
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