RTTNews - The Taiwan stock market has extended its winning streak to five sessions, adding more than 365 points or 5.5 percent on its way to a fresh eight-month closing high. The Taiwan Stock Exchange is closing on resistance at 6,720 points, but now analysts say that the market could instead pull back at the opening of trade on Friday.
The global forecast for the Asian markets is pessimistic, with the financial shares expected to come under pressure after it was announced that Britain's AAA credit rating might be in jeopardy. Downbeat economic data reinforces the negative sentiment. The European markets finished sharply lower, as did the U.S. markets - and the Asian bourses are also predicted to take a hit.
The TSE finished slightly higher on Thursday, bucking the regional trend of decline. Construction stocks finished with significant gains, while paper, cement, textile, technology and plastics sectors also finished higher. Food and financial stocks finished lower.
For the day, the index added 15.19 points or 0.22 percent to close at 6,718.81 after trading between 6,746.10 and 6,650.33. Volume was 7.56 billion shares worth 182.94 billion Taiwan dollars. There were 1,172 gainers and 999 decliners, with 126 stocks finishing unchanged. Among the gainers, Farglory Land Development Co rose 4.06 percent and Taiwan Semiconductor Manufacturing Co was 0.71 percent higher.
Wall Street offers a negative lead as stocks finished Thursday's session significantly lower after mild losses in the previous session. The major averages all closed in firmly negative territory as trader optimism dampened following the release of largely disappointing economic data.
The retreat came on the heels of another uninspiring jobs report from the U.S Labor Department for the week ended May 16. The data showed that first time jobless claims slowed but continuing claims rose for yet another week, reaching a new historic high. Meanwhile, the Philadelphia Federal Reserve's business activity index for the first half of May showed improvement but rose by less than expected, further mitigating risk appetite.
Some of the pessimism was moderated by forward looking indicators for April from the Conference Board, which came in slightly better than expected, raising some economic prospects for the coming months.
The broad-based losses on the day came as traders did some profit taking following the recent run-up seen in equities. In addition, with no considerable news on tap for Friday's session and markets closed on Monday for Memorial Day, equity markets worldwide saw considerable pullbacks.
The major averages opened notably lower following the jobs report and lingered in negative territory throughout the day, before finishing just off of their daily lows. Subsequently, the Dow closed down by 129.91 points or 1.54 percent to finish at 8292.13, the NASDAQ finished down by 32.59 points or 1.89 percent to end at 1695.25, and the S&P 500 also fell, closing down by 15.14 points or 1.68 percent to finish at 888.33.
In economic news, Taiwan is on Friday scheduled to release April figures for commercial sales and seasonally adjusted unemployment. Analysts are looking for a decline of 10.89 percent on year after the 12.22 percent annual decline in March. The unemployment rate is expected to climb to 5.9 percent, up from the current 5.72 percent.
Also, Taiwan's real gross domestic product dropped 10.24 percent year-over-year in the first quarter, compared with the 8.61 percent decline in the fourth quarter, revised from 8.36 percent reported initially, the Directorate-General of Budget, Accounting and Statistics said on Thursday. Economists had expected the economy to contract 9.26 percent. For 2008 as a whole, the real GDP increased 0.06 percent, revised from 0.12 percent estimated initially. Meanwhile, the real exports of goods and services decreased 27.15 percent annually in the first quarter.
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