Taiwan Stock Market Tipped To Add To Its Winnings

The Taiwan stock market on Wednesday wrote a finish to the three-day slide in which it had stumbled almost 320 points or 1.8 percent. The Taiwan Stock Exchange now sits just above the 17,660-point plateau and it’s likely to open in the green again on Thursday.

The global forecast for the Asian markets is upbeat following results of the FOMC’s monetary policy meeting. The European and U.S. markets were solidly higher and the Asian bourses figure to open in similar fashion.

The TSE finished modestly higher on Wednesday following mixed performances from the technology stocks and cement companies, while the financials were soft.

For the day, the index added 60.73 points or 0.35 percent to finish at 17,660.10 after trading between 17,556.87 and 17,678.78.

Among the actives, Cathay Financial fell 0.66 percent, while Mega Financial and Delta Electronics both lost 0.56 percent, CTBC Financial slumped 0.78 percent, Fubon Financial slid 0.40 percent, E Sun Financial eased 0.18 percent, Taiwan Semiconductor Manufacturing Company rose 0.17 percent, United Microelectronics Corporation and Hon Hai Precision both added 0.48 percent, Largan Precision shed 0.49 percent, Catcher Technology sank 0.97 percent, MediaTek dropped 0.93 percent, Formosa Plastic retreated 1.45 percent, Asia Cement gained 0.81 percent, Taiwan Cement dipped 0.11 percent and First Financial was unchanged.

The lead from Wall Street is broadly positive as the major averages opened slightly lower on Wednesday but then surged in the afternoon to finish sharply higher.

The Dow soared 383.25 points or 1.08 percent to finish at 35,927.43, while the NASDAQ spiked 327.94 points or 2.15 percent to end at 15,565.58 and the S&P 500 jumped 75.76 points or 1.63 percent to close at 4,709.85.

The late-day rally on Wall Street came after the Fed announced its widely expected decision to accelerate the pace of reductions to its asset purchases program. Citing inflation developments and further improvement in the labor market, the Fed said it has decided to reduce the monthly pace of its net asset purchases by $30 billion per month, double the previously announced $15 billion per month.

The Fed said it expects similar reductions in the pace of net asset purchases will likely be appropriate each month, pointing to an end to the program next March. Analysts partly attributed the subsequent rally to relief that the Fed was not more aggressive in accelerating the timetable for halting its asset purchases.

Meanwhile, the Fed also announced its widely expected decision to keep the target range for the federal funds rate at zero to 0.25 percent. The central bank’s latest projections forecast as many three rate hikes in 2022 compared to the lone rate hike forecast in September.

Despite the prospect of sooner than expected rate hikes, analysts suggested traders were pleased with the increased level of certainty provided by the Fed’s latest projections.

Crude oil futures settled higher on Wednesday after the Energy Information Administration (EIA) said crude inventories in the U.S. dropped by 4.6 million barrels last week. West Texas Intermediate crude oil futures for January ended up by $0.14 or 0.2 percent at $70.87 a barrel.

Closer to home, the de facto central bank in Taiwan will wrap up its monetary policy meeting today and then announce its decision on interest rates; the bank is widely expected to keep its benchmark lending rate steady at 1.125 percent.