The Taiwan stock market has finished lower now in two of three sessions following the three-day winning streak in which it collected more than 130 points or 2.6 percent along the way. The Taiwan Stock Exchange is now clinging to support at 5,700 points, but investors are not sanguine about the market's chances of holding that line at the opening of trade on Tuesday.
The global forecast for the Asian markets is wrought with uncertainty as investors are increasingly nervous over the spread of swine flu, with travel and tourism stocks expected to remain under pressure - although pharmaceuticals are likely to continue to outperform. Some mixed news out of the corporate world adds to the overall negative sentiment. The European markets ended mixed but near the unchanged line, while the U.S. markets were solidly in the red - and the Asian bourses are tipped for little movement with a touch of downside.
The TSE finished sharply lower on Monday, as investors continued to take profits from last week's win streak. Tourism and transportation stocks fell under heavy selling pressure throughout the session.
For the day, the index plummeted 175.72 points or 2.99 percent to close at 5,705.05 after trading between 5,672.25 and 5,946.97 on turnover of 136.80 billion Taiwan dollars. There were 1,850 decliners and 419 gainers, with 64 stocks finishing unchanged.
Among the decliners, Ambassador Hotel shed 6.91 percent, while Formosa International Hotels fell 5.61 percent, EVA Airways dropped 6.97 percent and China Airlines lost 6.26 percent.
Wall Street offers a negative lead as stocks ultimately closed well below the unchanged line after seeing some uncertainty for most of Monday's trading session. The lower close came as traders expressed concerns about the economic impact of the swine flu outbreak
Analysts say that traders used the swine flu scare as an excuse to take some money off the table, but a full blown epidemic could lead to a 10 to 15 percent correction. Although the flu does seem to be spreading, many doctors agree that the swine flu is no more panic worthy than any other breakout of the human flu during flu season. President Barack Obama said Monday that the spreading swine flu is something that should raise the country's state of alert but should not be seen as a cause for alarm.
On the corporate front, Verizon (VZ) reported first quarter net income of $0.58 per share, compared to $0.57 per share in the year-ago period. Excluding special items, net income attributable to Verizon was $0.63 per share, compared to $0.61 per share in same quarter last year. On average, analysts expected the company to report earnings of $0.59 per share.
Meanwhile, Whirlpool Corp. (WHR) reported first quarter earnings of $0.91 per share, compared to $1.22 in the prior year quarter. The company reported net sales of $3.57 billion, down from $4.61 billion in the year-ago period.
In other news, auto giant General Motors (GM) said that it will cut 21,000 hourly jobs and reduce its U.S. dealer count by 42 percent by the end of 2010 under a revised viability plan. The company also plans to phase out its Pontiac brand and focus on its four core brands in the U.S.
The major averages all ended the day firmly in negative territory, although well off their lows for the session. The Dow closed down 51.29 points or 0.6 percent at 8,025.00, the NASDAQ closed down 14.88 points or 0.9 percent at 1,679.41 and the S&P 500 closed down 8.72 points or 1.0 percent at 857.51.
In economic news, Taiwan's leading index rose a seasonally adjusted 1.5 percent month-on-month in March following a 1.1 percent increase in February, the Council for Economic Planning and Development said on Monday. The leading index increased for the second consecutive month in March.
However, the six-month annualized six-month rate of change showed a fall of 13.8 percent in March compared to an 18.4 percent decline in the previous month. Meanwhile, the coincident indicator rose 0.7 percent in March, after rising 0.5 percent in the previous month.
For comments and feedback: contact email@example.com