The Taiwan stock market has finished higher now in back-to-back sessions since it ended last week's five-day winning streak that saw it collect more than 430 points or 8 percent. The Taiwan Stock Exchange broke through resistance at 5,300 points, and now analysts say the market still has further upside at the opening of trade on Thursday.
The global forecast for the Asian markets is optimistic thanks to better than expected economic news out of the United States. Also, corporate earnings from the U.S. auto sector were dismal, but still better than expected - also providing a bit of positive sentiment. The European and U.S. markets ended higher across the board, and the Asian stocks are tipped to modestly follow that lead.
The TSE finished sharply higher on Wednesday, driven by significant gains among the technology issues and a more moderate increase among the financials.
For the day, the index jumped 103.61 points or 1.99 percent to close at 5,314.45 after trading between 5,271.83 and 5,341.31 on turnover of 102 billion Taiwan dollars.
Among the gainers, Chi Mei, Powerchip, Nanya Tech and ProMOS all jumped by the 7 percent daily limit, while Cathay Financial was up 3.43 percent, Acer Inc gained 3.92 percent and AU Optronics rose 1.6 percent.
The lead from Wall Street is upbeat as stocks showed a substantial turnaround over the course of the trading day on Wednesday, ending the day sharply higher after seeing some initial weakness. Investors shrugged off some negative news and turned their focus to better-than-expected reports on pending home sales, construction spending, and manufacturing activity.
The initial downward move came on the heels of the release of a report from ADP showing that non-farm private employment fell by a bigger than expected 742,000 jobs following a revised decrease of 706,000 jobs in February. Not long after the open, however, the National Association of Realtors said its index of pending home sales rose 2.1 percent to 82.1 in February from a reading of 80.4 in January. The increase by the index came as a surprise to economists, who had expected the reading to come in unchanged.
The Commerce Department also released its monthly report on construction spending for February, showing that spending fell 0.9 percent. Analysts had expected spending to fall 1.9 percent following a 3.5 percent decline in the previous month. Additionally, the ISM Manufacturing index edged up to 36.3 in March from 35.8 in February, although a reading below 50 still indicates a contraction in the sector. Economists had been expecting the index to come in at 36.0.
On the corporate front, the big three auto-makers continued to disappoint investors during Wednesday's session as all three posted massive declines in monthly sales. General Motors (GM) reported that total vehicle sales fell almost 45 percent in March to 156,380 units. Ford (F) also suffered a massive decline, with March sales plummeting about 41 percent year-over-year. Meanwhile, private auto giant Chrysler performed the best out of the big three, showing a decline in sales of less than 40 percent.
In other news, traders kept an eye on London throughout the session, waiting for news from the G20 summit of global leaders. The leaders will discuss efforts to deal with the weakness in the global economy. Thousands of protesters have taken to the London streets, expressing their anger over the state of the economy.
The major averages continued to perform well in late day trading, ending the session near their best levels of the day. The Dow closed up 152.68 points or 2 percent at 7,761.60, the Nasdaq closed up 23.01 points or 1.5 percent at 1,551.60 and the S&P 500 closed up 13.21 points or 1.7 percent at 811.08.
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