Market Commentary and Intraday News
Lower Open Called For Taiwan Stock Market
225 days ago
(RTTNews) - Ahead of Wednesday's National Day holiday, the Taiwan stock market had closed lower in consecutive trading days - dipping almost 100 points or 1.3 percent along the way. The Taiwan Stock Exchange closed just above the 7,590-point plateau, and now traders are expecting heavy selling pressure on Thursday as the market catches up on some negative sentiment.
The global forecast for the Asian markets continues to suggest consolidation thanks to continuing concerns over the situation in Europe. The downside may be capped, however, by bargain hunting following heavy losses on Wednesday. Also, the International Monetary Fund warned that banks in Europe may need to sell as much as $4.5 trillion in assets in 2013, in the absence of decisive and urgent policy measures. The European and U.S. markets finished lower and the Asian bourses figure to open in similar fashion.
The TSE finished modestly lower on Tuesday as losses from the technology, paper and plastic stocks were offset by gains from the food, cement, textile and finance sectors.
For the day, the index dipped 23.88 points or 0.31 percent to finish at 7,592.01 after trading between 7,590.75 and 7,631.96 on turnover of 80.56 billion Taiwan dollars.
Among the actives, HTC Corp plummeted by the 7 percent daily limit, while Taiwan Semiconductor Manufacturing Co. dropped 2.24 percent, Largan Precision shed 1.63 percent and Fubon Financial Holding jumped 1.09 percent.
The lead from Wall Street remains negative as stocks were down on Wednesday, with traders expressing continued concerns about the outlook for the global economy. The losses extended a recent downward move for the markets, with the major averages falling to their lowest levels in about a month.
The weakness was partly a negative reaction to earnings news from aluminum giant Alcoa, which kicked off the earnings season after the close of trading on Tuesday. While Alcoa reported Q2 results that beat estimates, it also lowered its forecast for global aluminum demand growth in 2012 to 6 percent from 7 percent. The lower guidance led to worries of disappointing forecasts from other companies.
Adding to the negative sentiment, oil giant Chevron warned that it expects its Q3 earnings to be substantially lower than in the second quarter. Chevron said it expects upstream earnings to be hurt by foreign exchange losses and lower liftings and realizations.
Meanwhile, traders largely shrugged off the Federal Reserve's Beige Book, which said economic activity expanded modestly since the last report. Consumer spending was called flat to up slightly, but also noted improvement in residential real estate conditions. Conditions in the manufacturing sector were described as mixed but were said to have improved somewhat from the previous report.
The major U.S. averages were firmly lower on Wednesday as the Dow plunged 128.56 points or 1 percent to finish at 13,344.97, while the NASDAQ fell 13.24 points or 0.4 percent to end at 3,051.78 and the S&P 500 slid 8.92 points or 0.6 percent to close at 1,432.56.
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