RTTNews - The Taiwan stock market on Friday wrote a finish to the modest two-day winning streak in which it had collected more than 150 points or 2.45 percent along the way. The Taiwan Stock Exchange fell through support at 6,450 points, and now analysts are suggesting that the market could extend that decline at the opening of trade on Monday.
The global forecast for the Asian markets offers little in the way of guidance. Some modestly positive economic news out of the United States is likely to be offset by geopolitical tensions regarding North Korea's stated intention to conduct further nuclear tests. The violence and protests surrounding the Iranian election between President Mahmoud Ahmadinejad and challenger Mirhossein Mousavi add to the uncertain sentiment. The European markets were mostly lower on Friday and the U.S. bourses ended nearly unchanged, and the Asian markets are expected to fall in between with mild losses.
The TSE finished sharply lower on Friday, dragged to the downside by significant losses in the heavily-weighted financial and technology sectors - although the properties provided a modicum of support.
For the day, the index dropped 119.14 points or 1.81 percent to close at 6,448.23 after trading between 6,443.86 and 6,586.20 on turnover of 128.85 billion Taiwan dollars. There were 1,268 decliners and 886 gainers, with 167 stocks finishing unchanged.
Among the decliners, Taiwan Semiconductor Manufacturing Co was down 3.95 percent, while United Microelectronics Corp lost 3.67 percent, MediaTek shed 2.31 percent, Hon Hai Precision dropped 2.88 percent, Cathay Financial shed 3.43 percent, Mega Financial fell 3.29 percent, Fubon Financial lost 1.86 percent and China Steel fell 0.52 percent. Bucking the trend, Prince Housing rose 6.74 percent and Universal Cement added 0.98 percent.
The lead from Wall Street is virtually flat as stocks finished on a mixed note on Friday following a muted reaction to some encouraging news this morning. The week's trading was slowed by below average volume, which prompted limited movement in the equity markets. Some investors have moved to the sidelines ahead of the usual calm of the summer season.
Earlier, trading on the New York Stock Exchange was disrupted by a breakdown in three servers, halting trading in 240 stocks. Several companies were forced to stop trading for a limited period, including Bank of America (BAC), General Electric (GE), Exxon Mobil (XOM) and Merck (MRK).
On the economic front, consumer sentiment continued to improve in the month of June, according to a report released by Reuters and the University of Michigan, although the reading rose by less than expected. The report showed that the preliminary reading of the consumer sentiment index for June came in at 69.0 compared to a reading of 68.7 in May. Economists had been expecting a somewhat more notable increase to a reading of 69.5.
Separately, a report from the Labor Department showed that import prices climbed by 1.3 percent in May, compared to a 1.1 percent increase in April. Export prices also rose, climbing by 0.6 percent in May following an increase of 0.4 percent in the previous month. Compared to the same month a year ago, import prices fell 17.6 percent, while export prices slipped by 6.5 percent.
In other news, White House National Economic Council Director Larry Summers stated that the goal of the Obama administration is to end its involvement in private industry as soon as possible. Speaking at the Council on Foreign Relations in New York, Summers said that the interventions were necessary and called for a new approach to too big to fail.
The major averages eventually ended the session on opposite sides of the unchanged line. While the NASDAQ closed down 3.57 points or 0.2 percent at 1,858.80, the Dow closed up 28.34 points or 0.3 percent at 8,799.26 and the S&P 500 closed up 1.32 points or 0.1 percent at 946.21. Despite the mixed performance for the session, the major averages all posted modest weekly gains. The Dow rose 0.4 percent for the week, while the NASDAQ and the S&P 500 posted weekly gains of 0.5 percent and 0.7 percent, respectively.
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