One day after ending the five-day winning streak that saw it collect more than 430 points or 8 percent, the Taiwan stock market turned right back to the upside again on Tuesday. The Taiwan Stock Exchange added slightly to support above 5,200 points, and now investors are looking for the market to extend those gains in Wednesday's trade.
The global forecast for the Asian markets is generally upbeat, with modest upside correction expected in most regional bourses after a couple of days of heavy losses. The automobile stocks have been under pressure in recent sessions but could level off - while the financials also are predicted to level off after heavy profit taking. The European markets finished sharply higher, while the U.S. markets ended more modestly in the green - and the Asian markets are likely to fall somewhere in between.
The TSE finished modestly higher on Tuesday, thanks to gains among the financials and a mixed performance among the technical issues. For the day, the index gained 4.79 points or 0.09 percent to close at 5,210.84 after trading between 5,194.93 and 5,286.45.
Among the actives, Compal Electronics was up 3.18 percent, while Powerchip was down 1.74 percent, Nanya Tech dropped 4.8 percent and Cathay Financial gained 1.03 percent.
Wall Street offers a positive lead as stocks moved higher throughout much of the trading session on Tuesday, although the major averages gave back some ground going into the close. The strength in the markets came as traders used the weakness in the two previous sessions as a buying opportunity.
Weak economic data helped to limit the upside for the markets, with a report from Standard and Poor's showing that home prices fell at a record annual rate in January. The report showed that the S&P/Case-Shiller 20-City Composite Home Price Index for January fell 19.0 percent compared to the same month a year ago, reflecting an acceleration from a revised 18.6 percent year-over-year decline in December.
Separately, the Institute for Supply Management - Chicago said its index of activity in the Chicago-area manufacturing sector fell to 31.4 in March from 34.2 in February, with a reading below 50 indicating a contraction in the sector. Meanwhile, the Conference Board's consumer confidence index edged up to 26.0 in March from a record low reading of 25.3 in February, although economists had been expecting a somewhat more significant increase by the index to a reading of 28.0.
In other news, the Senate Finance Committee examined the progress of the Troubled Asset Relief Program in a hearing on Tuesday, with the results of the first six months of the $700 billion financial bailout determined to have been unsteady. The program puts taxpayers at risk for $2.9 trillion, the Special Inspector General for the TARP Neil Barofsky said at the hearing.
Additionally, General Motors (GM) and Ford (F) announced new rounds of incentives, including payment protection for job losers, to boost customer confidence and jump-start vehicle sales. GM unveiled its GM Total Confidence plan, whereby customers can get payment protection for the first 24 months of ownership. Meanwhile, Ford launched its new Ford Advantage Plan, under which Ford will provide 12 months of payment protection.
The major averages pulled back well off their highs for the session in late day trading but managed to remain firmly positive. The Dow closed up 86.90 points or 1.2 percent at 7,608.92, the NASDAQ closed up 26.79 points or 1.8 percent at 1,528.59 and the S&P 500 closed up 10.34 points or 1.3 percent at 797.87.
In corporate news, personal computer maker Acer Inc saw a 17 percent increase in fourth-quarter profit, the company said on Tuesday, standing at 2.81 billion Taiwan dollars versus 2.4 billion Taiwan dollars a year earlier - although it missed analyst expectations for 2.97 billion Taiwan dollars. Fourth-quarter operating profit climbed an annual 15 percent to 3.98 billion Taiwan dollars.
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