RTTNews - The two-day winning streak for the Taiwan stock market came to a screeching halt on Monday, after it had added 100 points or 1.5 percent in the previous two sessions. The Taiwan Stock Exchange crashed through support at 6,600 points, although analysts are looking for a mild recovery by the opening of trade on Tuesday.
The global forecast for the Asian markets is optimistic, with many of the regional bourses poised for a recovery after being mired in lengthy and costly losing streaks. Financials are tipped to be a source of strength, although the gains could be slightly limited by continued weakness from the oil companies. The European and U.S. markets ended sharply higher as earnings season continues, and the Asian markets are also predicted to put on significant gains.
The TSE finished sharply lower on Monday, dragged to the downside by heavy losses among the financial, construction and paper stocks. Textiles also plunged, as did cement, plastic, food and technology shares.
For the day, the index plunged 239.04 points or 3.53 percent to close at 6,530.82 after trading between 6,797.72 and 6,525.90. Volume was 4.62 billion shares worth 121.06 billion Taiwan dollars. There were 2,051 decliners and 350 gainers, with 77 stocks finishing unchanged.
Among the decliners, Yuanta Financial shed 6.89 percent, while Mega Financial fell 6.79 percent, Yang Ming Marine fell 4.13 percent, Evergreen Marine dropped 3.09 percent, Ambassador Hotel shed 5.12 percent, Formosa International Hotels shed 4.54 percent, Taiwan Semiconductor Manufacturing Co dropped 1.96 percent and United Microelectronics Corp fell 2.95 percent.
The lead from Wall Street is broadly positive as stocks rallied amid some positive analyst comments on the financial sector after showing a lack of direction in early trading on Monday. The major averages finished in positive territory by substantial margins, staging their strongest performance of the month.
Financial stocks led the way higher on the heels of positive comments from influential analyst Meredith Whitney, who raised her rating on Goldman Sachs (GS) to Buy from Neutral. Whitney also said Bank of America (BAC) could provide value for investors.
On the earnings front, railroad operator CSX Corp. (CSX) is reported second quarter earnings after the close of trading, reporting earnings of $0.78 per share compared to $0.93 per share last year. Excluding the impact of discontinued operations, the company earned $0.72 per share.
Meanwhile, Novellus Systems (NVLS) reported an adjusted second-quarter loss of $39.3 million or $0.41 per share versus net income of $6.2 million or $0.06 per share in the year ago quarter. Wall Street analysts expected the company to report a loss of $0.38 per share for the quarter.
The major averages saw some further upside going into the close, ending the session at their best levels of the day. The Dow closed up by 185.16 points or 2.3 percent at 8,331.68, the NASDAQ moved up by 37.18 points or 2.1 percent to 1,793.21 and the S&P 500 rose by 21.92 points or 2.5 percent to 901.05.
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