Oversold Taiwan Stock Market May See Further Consolidation

(RTTNews) - The Taiwan stock market has finished lower in two consecutive trading days, crashing more than 1,810 points or 8.4 percent along the way. The Taiwan Stock Exchange now sits just above the 19,000-point plateau and it's got a weak lead again for Tuesday's trade.

The global forecast for the Asian markets is bleak on continuing concerns about the health of the U.S. economy. The European and U.S. markets were sharply lower on Monday and the Asian bourses are expected to open in similar fashion again - although this selloff is quite overdone and may fade as the day progresses.

The TSE finished sharply lower across the board on Monday, spooked by concerns over the health of the U.S. economy.

For the day, the index plummeted 1,807.21 points or 8.35 percent to finish at 19,830.88 after trading between 19,783.50 and 20,982.92.

Among the actives, Cathay Financial tanked 9.30 percent, while Mega Financial slumped 3.99 percent, CTBC Financial skidded 7.99 percent, First Financial lost 3.61 percent, Fubon Financial surrendered 9.09 percent, E Sun Financial dropped 4.16 percent, Taiwan Semiconductor Manufacturing Company plummeted 9.75 percent, United Microelectronics Corporation retreated 5.58 percent, Hon Hai Precision plunged 9.92 percent, Largan Precision stumbled 7.04 percent, Catcher Technology shed 2.97 percent, MediaTek crashed 9.08 percent, Delta Electronics tumbled by the 10 percent daily limit, Formosa Plastics contracted 4.36 percent, Nan Ya Plastics sank 5.16 percent and Asia Cement slid 2.65 percent.

The lead from Wall Street is brutal as the major averages opened deep in the red on Monday and stayed that way throughout the trading day.

The Dow plummeted 1,033 .99 points or 2.60 percent to finish at 38,703.27, while the NASDAQ tanked 576.08 points or 3.43 percent to close at 16,200.08 and the S&P 500 plunged 160.23 points or 3.00 percent to end at 5,186.33.

The continued weakness on Wall Street came on concerns that the U.S. economy may slip into recession following last Friday's disappointing jobs report.

Stocks regained some ground following the release of a report from the Institute for Supply Management showing service sector activity in the U.S. turned positive in the month of July.

Oil futures lower on Monday on concerns about the outlook for demand amid fears the U.S. economy could slip into a recession. West Texas Intermediate Crude oil futures for September sank $0.58 or 0.7 percent at $72.94 a barrel.

Closer to home, Taiwan will see July data for consumer prices later today; in June, overall inflation was up 0.26 percent on month and 2.42 percent on year.