Market Commentary and Intraday News

Taiwan Bourse May Halt Winning Streak

239 days ago

(RTTNews) - The Taiwan stock market has closed higher now in consecutive trading days, collecting more than 40 points or 0.45 percent along the way. The Taiwan Stock Exchange ended just below the 7,770-point plateau, and now analysts are predicting renewed selling pressure at the opening of trade on Tuesday.

The global forecast for the Asian markets is slightly negative thanks to ongoing concerns over the health of the global economy in general and the European economy in particular. German business confidence unexpectedly declined, while some of the continental leaders are butting heads over their plan of economic action. The European and U.S. markets were down on Monday, and the Asian bourses are expected to open in similar fashion.

The TSE finished slightly higher on Monday following gains from the construction, cement, food, paper, textile, technology and finance sectors.

For the day, the index added 13.71 points or 0.17 percent to finish at 7,768.30 after trading between 7,706.95 and 7,781.55 on turnover of 74.06 billion Taiwan dollars. There were 2,442 decliners and 1,756 gainers, with 429 stocks finishing unchanged.

Among the actives, Microelectronics Technology surged by the 7 percent daily limit, MediaTek climbed 2.64 percent, Acer jumped 2.54 percent, Genius Electronic Optical spiked 2.21 percent, while United Microelectronics Corp shed 1.22 percent, Hon Hai dropped 1.03 percent and HTC dipped 1.58 percent.

The lead from Wall Street suggests mild consolidation as stocks ended Monday's trading mostly lower, as traders continued to express concerns about the global economic outlook despite recent announcements of further monetary stimulus. Selling pressure was somewhat subdued, however, limiting the downside for the markets.

The weakness followed troubling news from overseas, including remarks from an adviser to the People's Bank of China predicting that China's economic slowdown will continue. Song Guoqing, a Peking University professor, forecast 7.4 percent Chinese GDP growth in the third quarter and 7.3 to 7.4 percent growth in the fourth quarter. The numbers would represent a continued slowdown from the 7.6 percent growth seen in the second quarter and the 8.1 percent expansion in the first quarter.

Disappointing economic news out of Europe also weighed, with the Ifo Institute saying its index of German business confidence fell to 101.4 in September from 102.3 in August - missing forecasts for a score of 102.5. Highlighting an unexpected drop by the Ifo expectations index, which fell to 93.2 in September from 94.2 in August, Danske Bank said the data clearly signals that Germany is in recession.

Negative sentiment was also generated by news of a disagreement between German Chancellor Angela Merkel and French President Francois Hollande over the timing of the introduction of a banking union.

Among individual stocks, Apple (AAPL) moved to the downside on the day despite announcing that it sold over five million of its new iPhone 5 in the three days after its launch on Friday.

The major U.S. averages were down on Monday as the Dow dipped 20.55 points or 0.2 percent to finish at 13,558.92, while the NASDAQ fell 19.18 points or 0.6 percent to end at 3,160.78 and the S&P 500 edged down 3.26 points or 0.2 percent to close at 1,456.89.

In economic news, the unemployment rate in Taiwan increased to 4.29 percent on a seasonally adjusted basis in August from 4.25 percent in July, the Director-General of Budget Accounting and Statistics said on Monday. Economists expected 4.28 percent. On an unadjusted basis, the jobless rate was 4.40 percent, up from 4.31 percent in July.

Also, Taiwan's industrial production increased 1.89 percent on year in August, the Ministry of Economic Affairs said on Monday, versus forecasts for a 0.44 percent contraction. On month, industrial production moved up a seasonally adjusted 0.23 percent in August. In the eight months ended August, production declined 1.98 percent on year earlier.

Finally, the agency said Taiwan's commercial sales, which refer to wholesale, retail and catering industry turnover, decreased 1.2 percent year-on-year in August. On a monthly basis, overall sales, on an unadjusted basis, declined 2 percent.

For comments and feedback: contact editorial@rttnews.com

Copyright(c) 2012 RTTNews.com. All Rights Reserved

View all of today's news »