Rally in US bodes well for Taiwan on first day of 2013 trade: experts
The China Post news staffTAIPEI, Taiwan -- A rally in U.S. stocks on New Year's Eve bodes positively for gains in Taiwan stocks today as they open for their first session of 2013, experts said.
January 2, 2013, 12:01 am TWN
U.S. stocks were open on Dec. 31 and surged sharply, with Dow Jones Industrial Average closing up 166 points, on prospect the White House and the U.S. Congress would reach a last-minute deal to resolve the fiscal cliff crisis.
Earlier on Dec. 31, U.S. President Barack Obama announced that a deal to avert austerity measures known as the fiscal cliff had taken shape, and that both Democrats and Republicans had narrowed their differences on levying higher taxes on the rich and trimming the size of the federal government. The announcement sent the Dow Jones as well as the S&P 500 and Nasdaq sharply higher.
The rally led to optimism for local analysts over Taiwan stocks, which closed Monday and Tuesday in observance of the New Year. They will resume trading today.
According to statistics compiled from 2000, the odds of Taiwan stocks going up on the first session after the New Year's are 76.91 percent. Stocks closed down only in 2006, 2008 and last year. The odds of stocks closing higher the first week after the New Year's also stand at 60 percent.
For January, the odds of stocks closing higher are only 50 percent, yet the margin of increase averages 3.5 percent. In 2001, stocks closed 25-percent higher in January.