RTTNews - The Taiwan stock market has finished higher now in consecutive sessions, collecting more than 210 points or 3.2 percent in the process. The Taiwan Stock Exchange broke through resistance at 6,500 points, and now investors are optimistic that the market could challenge the 6,600-point level at the opening of trade on Tuesday.
The global forecast for the Asian markets is positive, thanks to better than expected economic data and corporate news out of the United States. A rise in the price of oil has given commodities a boost, which helped to push the European and U.S. markets firmly into positive territory, and the Asian markets are predicted to do the same.
The TSE finished sharply higher on Monday, thanks to gains among the properties and construction stocks.
For the day, the index gained 88.72 points or 1.37 percent to close at to 6,577.81 after trading between 6,457.14 and 6,577.81 on turnover of 166.47 billion Taiwan dollars. There were 1,209 gainers and 952 decliners, with 142 stocks finishing unchanged.
Among the actives, Taiwan Semiconductor Manufacturing Co gained 2.19 percent, while United Microelectronics Corp fell 0.74 percent, Kee Tai Properties rose 6.95 percent, Kuo Yang Construction gained 6.79 percent, Goldsun Development added 6.60 percent, Taiwan Cement rose 4.45 percent, China Steel added 2.79 percent and MediaTek rose 2.48 percent.
The lead from Wall Street is broadly optimistic as stocks rallied on Monday after a notably lower close in the previous session, bolstered by hopes about the housing market. The major averages all closed at their best levels of the day.
Traders considered a report from the National Association of Home Builders that said its index of homebuilder sentiment rose to 16 in May, compared to a level of 14 in April. The figure was the best reading since September, fueling speculation that the housing sector is bottoming and economic recovery may be around the corner. Further, the report indicated that attitudes of home builders improved for both the present situation and for the next several months.
Housing and housing related stocks rallied on the data, being bolstered further by better-than-expected earnings from home improvement retailer Lowe's (LOW). The company announced first-quarter net income of $0.32 per share, beating out Wall Street analyst estimates of $0.25 per share. Shares advanced on the heels of the earnings report, climbing away from a six-week low set on Friday.
Traders will also consider earnings from Home Depot, Inc. (HD), scheduled to release financial results for the first quarter on Tuesday. Analysts project the number one U.S. home improvement retailer will report earnings of $0.29 per share, sharply lower than last year's $0.41 per share, with 11.4 percent anticipated decline in sales.
Wall Street now turns its attention to the Commerce Department data on housing starts for April. The headline housing starts figure is expected to climb to 527,000 from March's figure of 510,000. The report is also expected to show building permits at 530,000 for April up from previous month's level of 516,000. Although the figures are expected to rise, economists are still uncertain that a trough has been reached. According to Wachovia Securities, housing starts may hover around the half-million mark for one more month before beginning to slowly climb in the second half of the year.
In other economic news, Treasury Secretary Timothy Geithner commented that although the economy is stabilizing, there are still some difficulties ahead. In an early afternoon interview, Geithner stated that Even as growth starts to turn positive, which will happen...it's not going to feel better for a long time for millions of Americans.
The Federal Reserve continued its treasury buyback program this morning, part of its quantitative easing efforts. The New York arm of the Federal Reserve purchased $3.18 billion worth of securities with maturity dates ranging from August of 2019 to February of 2026. The day's buyback attracted strong interest, with a total of $15.22 billion in treasuries submitted for the purchase. With the purchase, the government has bought back $107.87 billion in treasuries since the purchase program began on March 25th.
The major indices closed prominently higher, with the Dow closing up 235.44 points or 2.85 percent to close at 8504.08, the NASDAQ finishing up 52.22 points or 3.11 percent to end at 1732.36, and the S&P 500 closing higher by 26.83 points or 3.04 percent to close at 909.71.
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