(RTTNews) - The Taiwan stock market on Monday extended its winning streak to five sessions, collecting more than 350 points or 8 percent in the process. The Taiwan Stock Exchange broke through resistance at 4,500 points, but analysts expect the market to fall right back below that level when it opens for business on Tuesday - following the rest of the region to the downside.

The global forecast for the Asian markets is sharply negative as economic data confirmed that the United States is indeed in a recession and has been for a year - heightening fears that the recession will grow worldwide and last for several years. The U.S. markets responded to the news with heavy losses that also were a bit of correction following major gains last week. The Asian bourses are also expected to move significantly to the downside.

The TSE finished sharply higher again on Monday, thanks to solid gains among the financial stocks, transportation issues, tourism shares and the heavily weighted technology sector.

For the day, the index added 57.94 points or 1.30 percent to close at 4,518.43 after trading between 4,418.24 and 4,567.76 on turnover of 66.88 billion Taiwan dollars. There were 943 gainers and 405 decliners, with 338 stocks finishing unchanged.

Among the gainers, China Airlines, EVA Airways, Ambassador Hotel, Chunghwa Picture Tubes, Mega Financial, Yuanta and China Development all were up by daily maximum 7 percent, while Taishin Financial added 6.87 percent, Chinatrust Financial gained 6.22 percent, Cathay Financial rose 2.61 percent, Uni-President Enterprises rose 4.85 percent, Taisun added 3.65 percent, Far Eastern Textile gained 1.55 percent and Nan Ya Plastics added 2.10 percent.

Wall Street offers a broadly negative lead as stocks moved sharply lower over the course of the trading day on Monday after turning in a strong performance last week. The major averages showed a steep drop at the open and continued lower throughout much of the session. The initial weakness came as investors took profits following the substantial gains seen last week, with the markets seeing further downside as investors reacted to some negative economic news as well as speeches from both Fed Chairman Bernanke and Treasury Secretary Paulson.

On the economic front, the Institute for Supply Management’s index of activity in the manufacturing sector fell to 36.2 in November from 38.9 in October, with a reading below 50 indicating a contraction in the sector. With the decrease, the index fell to its lowest level since May of 1982. Separately, the Commerce Department released its report on construction spending in the month of October, showing that spending fell by more than expected amid a notable decrease in spending on residential construction.

Speaking at an event hosted by the Greater Austin Chamber of Commerce in Austin, Texas, Federal Reserve Chairman Ben Bernanke said that further interest rate cuts from already low levels were “certainly feasible,” but he warned that the impact from any additional rate cuts would be “limited.” Bernanke said that the financial markets are better off for the moves authorities have taken lately, but he noted that absolute stability would take some time. He also predicted that the economy would likely remain weak for some time.

In his speech, Treasury Secretary Henry Paulson said that government actions taken to combat the financial crisis have made progress, though he noted that there is still much improvement that needs to be made. Paulson, who will be replaced as Treasury Secretary by New York Fed President Timothy Geithner when the next presidential administration takes over in January, also said that the government remains active in developing new programs.

The major averages saw some further downside going into the close of trading, ending the day at or near their worst levels of the day. The Dow closed down 679.95 points or 7.7 percent at 8,149.09, the Nasdaq closed down 137.50 points or 9.0 percent at 1,398.07 and the S&P 500 closed down 80.03 or 8.9 percent at 816.21.

In corporate news, contract chip maker Taiwan Semiconductor Manufacturing Co trimmed its Q4 sales and profit margin forecasts on Monday, to between 63 billion and 65 billion Taiwan dollars from a previous forecast of 69 billion Taiwan dollars to 71 billion Taiwan dollars. The new sales forecast is about 30 percent lower than TSMC’s sales in the third-quarter. TSMC also cut its forecast for its gross profit margin in Q4 to 30 to 32 percent.

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