RTTNews - The fresh trading week can't start soon enough for the Taiwan stock market after it finished lower every day last week, shedding more than 400 points or 5.87 percent to a five-week closing low. The Taiwan Stock Exchange is clinging to support at the 6,650-point plateau, although now investors are hopeful that the market could begin a modest recovery by the opening of trade on Monday.
The global forecast for the Asian markets is positive, thanks to better than expected economic news out of the United States. Housing stocks are expected to see strength for a change on Monday, while resource stocks also are tipped higher. The European and U.S. markets saw sharp gains on Friday, and now the Asian markets are forecast to extend those gains.
The TSE finished sharply lower again on Friday, thanks to heavy losses among the financials, technology stocks and airlines.
For the day, the index dropped 78.43 points or 1.16 percent to close at 6,654.80 after trading between 6,629.10 and 6,824.65.
Among the actives, Mediatek shed 3.35 percent, while HTC eased 0.60 percent, China Airlines lost 1.83 percent, Sinopac Financial dropped 3.03 percent and Acer added 1.32 percent.
The lead from Wall Street is firmly optimistic as stocks saw a notably strong outing on Friday, with early buying interested spearheaded by better than expected existing home sales data and relatively optimistic economic commentary from Federal Reserve Chairman Ben Bernanke. The major averages all rose by substantial margins on the day, extending their winning streak for the fourth straight session.
Friday's rally was largely sparked a report from the National Association of Realtors showing that existing home sales increased by much more than expected in the month of July, with the headline figure rising for the fourth consecutive month. Existing home sales rose 7.2 percent to an annual rate of 5.24 million units in July from a 4.89 million unit rate in June. Economists had been expecting a more modest increase to a 5.0 million unit rate. The increase in sales was the largest monthly gain on record for the total existing-home sales series dating back to 1999. With the increase, existing home sales rose for the fourth consecutive month, the first four-month winning streak since June of 2004.
The markets also looked to remarks from Federal Reserve Chairman Ben Bernanke, who spoke about the recent financial crisis and the near-term economic outlook at the Kansas City Fed's annual conference in Jackson Hole, Wyoming. The Fed chief said, Economic activity appears to be leveling out, both in the United States and abroad, adding that the prospects for a return to growth in the near term appear good. However, Bernanke warned that the recovery might be sluggish at first, with unemployment declining only gradually from high levels.
On the earnings front, Gap Inc. (GPS), Ann Taylor Stores (ANN) and J. M. Smucker Company (SJM) reported earnings that beat Wall Street estimates on the bottom line.
The major averages were rangebound for much of the afternoon, although they reached new highs for the session in the final hour of trading. The Dow closed up by 155.91 points or 1.7 percent at 9,505.96, the NASDAQ climbed by 31.68 points or 1.6 percent to 2,020.90 and the S&P 500 rose by 18.76 points or 1.9 percent to 1,026.13. With the four-day winning streak, the major averages all closed notably higher for the week, ending the session at multi-month closing highs. The Dow advanced by 2 percent, the NASDAQ moved up by 1.8 percent and the S&P 500 posted a gain of 2.2 percent.
In economic news, Taiwan will on Monday provide July numbers for commercial sales, export orders, industrial production and unemployment. Commercial sales are seen lower by 4.2 percent on year after the 5.32 percent annual decline in June. Export orders are projected to fall 9.67 percent on year after shedding 10.91 percent in the previous month. Industrial output is forecast to fall an even 10 percent on year after dropping 11.35 percent a month earlier. The unemployment rate is expected to come in at 5.9 percent, up from the current 5.32 percent.
For comments and feedback: contact firstname.lastname@example.org