Taiwanese share prices are expected to fall next week on fears that a weakening US economy will hurt exporters, dealers said Friday. Investors had turned bearish after the local bourse fell below the psychologically important 8,400 points level, they said.
For the week to November 23, the weighted index closed down 422.62 points or 4.82 percent at 8,342.20 after a 2.30 percent decline a week earlier. Average daily turnover stood at 117.84 billion Taiwan dollars (3.64 billion US), compared with 128.83 billion dollars a week earlier.
Foreign institutional investors were likely to be sellers, dealers said. "Foreign investors have stood at the sell side recently. I expect them to continue doing so unless Wall Street stabilises," Concord Securities analyst Allen Lin said.
The local market would likely test 8,200 points next week, with a barrier seen at around 8,500 points, dealers said. Few could predict when Wall Street would bottom out with the US facing a credit crunch and an economic slowdown, Lin said.
The performance of US stocks was expected to continue to set the beat for Taiwan, the expert added. "Pocketing cash seems to be a wiser thing to do now. I suggest investors here keep cash at 60-70 percent of their portfolios," Lin said.
Another dealer, who wished to remain anonymous, said some investors appeared to be ignoring the fact that domestic industries appeared to be in good shape. "Market confidence has been hurt badly," he said.
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