Market Commentary and Intraday News
Higher Open Called For Taiwan Stock Market
288 days ago
(RTTNews) - The Taiwan stock market on Monday snapped the two-day slide in which it had retreated more than 50 points or 0.8 percent. The Taiwan Stock Exchange finished just above the 7,285-point plateau, and now traders are anticipating another strong start when the market opens on Tuesday.
The global forecast for the Asian markets remains upbeat following good news regarding the European debt concerns. Greece's international creditors said the embattled euro area member is committed to the planned budget cuts. Profit taking may limit the upside, along with remarks by Italian Prime Minister Mario Monti - who warned that Europe is facing the threat of a psychological disintegration. The European and U.S. markets finished higher, and the Asian bourses are expected to open in similar fashion.
The TSE finished modestly higher on Monday following gains from the plastic, cement, food, textile, finance, technology, paper and construction sectors.
For the day, the index gathered up 68.82 points or 0.95 percent to finish at 7,286.33 after trading between 7,276.60 and 7,340.56 on turnover of 81.23 billion Taiwan dollars. There were 2,305 gainers and 1,844 decliners, with 433 stocks finishing unchanged.
Among the gainers, Hon Hai Precision Industry surged by the 7 percent daily maximum, while Foxconn Technology spiked 6 percent, Taiwan Semiconductor Manufacturing Co. jumped 1.38 percent and United Microelectronics Corp. climbed 2.42 percent.
The lead from Wall Street is positive as stocks gave back ground in the latter part of Monday's trade but still ended mostly higher after seeing early strength. The markets extended the strong upward move that began Friday. Despite the late-day pullback, the major averages all ended the session at their highest closing levels in three months.
The early upward move came as traders continued to react positively to last Friday's monthly jobs report, which showed that the U.S. economy added 163,000 jobs in July compared to expectations for an increase of 100,000 jobs. However, the unemployment rate unexpectedly edged up to 8.3 percent in July from 8.2 percent in June.
Optimism about the financial situation in Europe also contributed to the early strength, with traders expecting the European Central Bank to take additional steps to address the ongoing debt crisis. Buying interest was also generated by news that Greece and its international creditors have agreed on the need to strengthen policy efforts and meet the country's bailout conditions. The lenders are set to resume discussions with Greek authorities next month.
But remarks by Italian Prime Minister Mario Monti helped to limit the upside for the markets, as he warned that Europe is facing psychological disintegration and urged all leaders to become more independent from their parliaments. In an interview with German magazine Der Spiegel, Monti said the debt crisis risks the future of the single-currency bloc.
Among individual stocks, shares of Best Buy moved sharply higher on news that the consumer electronic retailer's founder and chairman Richard Schulze offered to acquire the company for $24 to $26 per share in cash. On the other hand, Knight Capital Group came under pressure after the financial services company said it has entered into an agreement for the sale of stock in an effort to survive the huge trading loss it incurred on erroneous trades.
The major averages showed a notable move to the downside going into the close but ended the day in positive territory. The Dow edged up 21.34 points or 0.2 percent to finish at 13,117.51, while the NASDAQ rose 22.01 points or 0.7 percent to end at 2,989.91 and the S&P 500 crept up 3.24 points or 0.2 percent to 1,394.23.
In economic news, Taiwan's consumer price index rose 2.46 percent year-on-year in July, the Director-General of Budget, Accounting and Statistics said on Monday - faster than the 1.77 percent increase in June. Economists expected the index to rise 1.87 percent. The core inflation was up 0.96 percent. Month-on-month, the CPI rose 0.38 percent and the core index rose 0.1 percent.
Also, Taiwan's wholesale prices decreased 1.71 percent annually in July compared to expectations for a 1.5 percent fall. Month-on-month, the index dropped 0.08 percent.
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