Taiwan Market Could Snap Skid

(RTTNews) - The Taiwan stock market finished lower for a third consecutive session, shedding more than 500 points or 10 percent in that span before getting a positive bounce of support at 5,000 points. Now analysts say that the Taiwan Stock Exchange is in a good position to end that losing streak when it opens on Tuesday, following the rest of the region to the upside.

The global forecast is charged with optimism after all three of the major U.S. stock markets surged more than 11 percent - including a record point gain by the Dow Jones Industrial Average. The positive sentiment comes as additional details are revealed about the U.S. government's bailout package for the troubled financial sector. Several other central banks around the world also continued to increase liquidity, adding to the optimism.

The TSE finished sharply lower on Monday, after sitting out Friday's market holiday for National Day. The financial sector, already oversold in recent weeks, saw a sharp decline again, while the technical stocks also took a hit.

For the day, the index lost 110.27 points or 2.15 percent to close at 5,020.44 after trading between 4,971.36 and 5,025.73 on turnover of 44.88 billion Taiwan dollars.

Among the decliners, United Microelectronics Corp lost 2.50 percent, while Cathay Financial lost 3.46 percent and Taishin Financial shed 3.47 percent. Finishing higher, Taiwan Semiconductor Manufacturing Co. rose 1.19 percent.

Wall Street provides a broadly positive lead as the U.S. stock markets staged a substantial rebound during trading on Monday after seeing significant weakness last week. The major averages all ended the session with standout gains, as traders went bargain hunting. The strength in the markets came as optimism about the latest round of government measures to stem the credit crisis inspired some traders to pick up stocks at reduced levels.

Earlier in the day, Neel Kashkari, the Treasury Department official tapped to oversee the government's bailout of the financial markets, outlined how the government will utilize the $700 billion rescue plan that was passed earlier this month.

Additionally, the Federal Reserve, the Bank of England, the European Central Bank, the Bank of Japan, and the Swiss National Bank jointly announced further measures to improve liquidity in short-term U.S. dollar funding markets. While the BoE, ECB, and SNB said they would conduct tenders of U.S. dollar funding with 7-day, 28-day, and 84-day maturities at fixed interest rates, the Bank of Japan said it would be considering the introduction of similar measures.

Over the weekend, U.S. Treasury Secretary Henry Paulson confirmed that he is considering plans for the U.S. government to invest in banks. Paulson said the financial rescue package gives the Treasury Department authority to inject fresh capital into the system.

Meanwhile, the Group of Seven finance ministers signed a one-page statement pledging to work together to stabilize the markets. There were no specific proposals included in the statement, but the G7 expressed support for plans to partially nationalize a number of banks in the U.K. and U.S.

The major averages saw some further upside going into the close, ending the session at or near their highs for the session. The Dow posted its biggest one-day point gain on record, closing up 936.42 points or 11.1 percent at 9,387.61, while the Nasdaq closed up 194.74 points or 11.8 percent at 1,844.25 and the S&P 500 closed up 104.13 points or 11.6 percent at 1,003.35.

In corporate news, Taiwan makers of computer network equipment saw their revenue rise by an average of more than 6 percent in the first half of this year. Revenues for the group were up to 26.4 billion Taiwan dollars, up from 24.9 billion Taiwan dollars a year earlier.

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