Market Commentary and Intraday News

Taiwan Shares Poised To Break Resistance At 7,500 Points

220 days ago

(RTTNews) - The Taiwan stock market on Tuesday wrote a finish to the five-day losing streak in which it had given away nearly 275 points or 3.6 percent. The Taiwan Stock Exchange closed just above the 7,470-point plateau, and now analysts are predicting continued support at the opening of trade on Wednesday.

The global forecast for the Asian markets is broadly upbeat thanks to solid earnings news and optimism that Spain may finally apply for a bailout. The markets should respond favorably to news that financial giant Goldman Sachs (GS) beat forecasts, as did Coca-Cola (KO) and Johnson & Johnson (JNJ). In addition, reports are circulating that the Spanish government is prepared to officially request a bailout, providing a measure of clarity for the region. The European and U.S. markets were sharply higher on Tuesday and the Asian bourses are expected to open in similar fashion.

The TSE finished modestly higher on Tuesday as gains from the technology, construction, finance, food, textile and cement stocks were dented by weakness from the plastic shares. The paper sector was unchanged.

For the day, the index collected 52.12 points or 0.70 percent to finish at the daily high of 7,471.02 after trading as low as 7,437.79 on turnover of 58.41 billion Taiwan dollars.

Among the gainers, Chimei Innolux and AU Optronics both surged by the 7 percent daily maximum, while Quanta Computer jumped 3.94 percent, Taiwan Semiconductor Manufacturing Co. climbed 1.28 percent, Huang Hsiang Construction spiked 1.66 percent and E. Sun Financial Holding collected 1.90 percent.

The lead from Wall Street remains positive as stocks were higher on Tuesday with traders reacting positively to the latest batch of earnings news. The markets extended Monday's upward move, continuing to recover from last week's weakness.

The rally followed quarterly results from some big-name companies, including financial giant Goldman Sachs (GS), which reported adjusted third quarter earnings of $2.85 per share compared to a year-ago loss of $0.84 per share, while analysts had expected earnings of $2.12 per share.

Beverage giant Coca-Cola (KO) also saw Q3 earnings that beat estimates but missed on revenues. Johnson & Johnson (JNJ) reported third quarter earnings and sales that exceeded estimates and also raised its full-year guidance.

Traders also reacted to news that health insurer UnitedHealth (UNH) raised its full-year guidance and that online retailer Amazon (AMZN) is hiring for more than 50,000 seasonal positions this holiday season.

Shares of Citigroup (C) were also in focus after the financial giant announced that Vikram Pandit has stepped down as the company's Chief Executive Officer and as a member of the Board. Citigroup's board unanimously elected Michael Corbat as CEO and a director of the Board. Corbat previously served as Citigroup's CEO of Europe, Middle East and Africa.

Separate reports showing a rebound by industrial production and a continued increase in homebuilder confidence also helped to push stocks higher. The Labor Department also released a report showing that consumer prices rose by slightly more than expected in September due to a jump in energy prices.

The major U.S. averages were firmly higher again on Tuesday as the Dow jumped 127.55 points or 1 percent to finish at 13,551.78, while the NASDAQ surged 36.99 points or 1.2 percent to end at 3,101.17 and the S&P 500 advanced 14.79 points or 1 percent to end at 1,454.92.

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