The Taiwan stock market has finished higher now in three consecutive sessions, adding more than 130 points or 2.3 percent in the process. The Taiwan Stock Exchange is nearing resistance at 5,900 points, but analysts suggest that the market may fall short in its bid to break through that barrier in Thursday's trade.
The global forecast for the Asian markets is mixed with a touch of downside, thanks to a series of disappointing quarterly reports. Financials are expected to remain under pressure, although some of the bigger exporters and technology stocks may provide support. The European stock markets finished sharply higher and the U.S. markets ended mostly lower - and the Asian markets are predicted to see equal dichotomy.
The TSE finished barely higher on Wednesday, thanks to sharp gains from the food and cement stocks, while the technology shares and the textiles also ended in positive territory.
For the day, the index added 4.7 points or 0.08 percent to close at 5,886.11 after trading between 5,856.13 and 5,925.92 on turnover of 135.47 billion Taiwan dollars. There were 1,467 gainers and 717 decliners, with 136 stocks finishing unchanged.
Among the actives, Wei Chuan Foods Corp was limit-up, while Taiwan Semiconductor Manufacturing Co lost 1.74 percent, United Microelectronics Corp was 5.2 percent higher and Asustek fell 1.62 percent.
The lead from Wall Street is modest pessimism as stocks experienced considerable volatility over the course of the trading day on Wednesday, with the major averages unable to sustain any significant moves. The choppy trading came as investors continued to digest mixed earnings news.
Early on in the session, traders reacted negatively to quarterly results from Morgan Stanley (MS), which became one of the few major financial companies to report weaker than expected first quarter results. Morgan Stanley reported a much wider than expected first quarter loss of $0.57 per share and revealed that it has slashed its quarterly dividend by 80 percent to $0.05 a share.
Separately, Boeing (BA) reported first quarter net income of $610 million, down 50 percent from last year quarter's $1.21 billion. Revenues for the quarter rose 3 percent to $16.5 billion from last year's $15.99 billion. Looking forward, the aerospace giant reaffirmed its full year revenue guidance but lowered its earnings guidance due to lower earnings at its commercial airplanes business.
Meanwhile, fast food giant McDonald's (MCD) reported first quarter net income of $0.87 per share, compared to $0.81 per share in the same quarter of last year, while analysts expected the company to report earnings of $0.82 per share.
In other news, Treasury Secretary Timothy Geithner spoke to the Economics Club of Washington earlier in the day, hinting that policymakers might be forced to alter their recovery strategies as the global financial crisis drags on. He explained that the revised estimate from the International Monetary Fund for global growth could spark a change in policy. The IMF lowered its 2009 outlook, now predicating a contraction of 1.3 percent for the year compared to its previous estimate of 0.5 percent growth.
The major averages pulled back sharply going into the close, with the Dow and the S&P 500 falling firmly into negative territory. While the NASDAQ managed to hold onto a modest gain, closing up 2.27 points or 0.1 percent at 1,646.12, the Dow closed down 82.99 points or 1.0 percent at 7,886.57 and the S&P 500 closed down 6.53 points or 0.8 percent at 843.55.
In economic news, Taiwan will on Thursday provide export orders and industrial output for March. Export orders are predicted to fall 28 percent on year after the 22.47 percent annual decline in the previous month. Industrial output is called lower by an annual 30.2 percent after the 27.14 percent decline on year a month earlier.
Also, Taiwan's jobless rate climbed to 5.81 percent in March from 5.75 percent in the preceding month, the Directorate General of Budget, Accounting and Statistics said Wednesday. Economists expected the rate to come in at 5.8 percent. In March, the number of unemployed increased to 630,000 from 624,000 in February. Meanwhile, the number of employed persons remained almost stable at 10.22 million in March. At the same time, the labor force increased to 10.85 million from 10.84 million in February.
Finally, the statistical office said the total non-agricultural payroll employment fell by 56,000 or 0.89 percent in February from the previous month. Year-on-year, the payroll employment declined 3.8 percent in February. During the month, the average monthly earnings per employee in the industrial and service sectors stood at TWD41,417. This represents a 39.73 percent drop in earnings from January and a 30.49 percent fall from the previous year.
The number of hours of work totaled 163.6 hours in February, rising by 17.9 hours month-on-month and 16.9 hours from last year. Labor productivity, in the manufacturing sector, was down 3.74 percent from January and fell 29.14 percent year-on-year.
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