Taiwan share prices are expected to extend gains next week on hopes of better ties with China ahead of bilateral talks due to be resumed after more than a decade, dealers said Friday.
Transport and tourism shares and China plays, which have close business relations with the mainland are likely to attract market attention as they could gain most from improved cross strait relationships, they said. The electronic sector may follow a rebound among US high tech stocks on their high correlation in share prices to push the market higher, they added.
The market is expected to test the crucial 9,000 point level next week, while profit taking may surface during the trade with a technical support seen at around 8,700 points, dealers said.
In the week to June 6, the weighted index closed up 126.27 points or 1.47 percent at 8,745.35, after a 2.44 percent fall a week earlier. Average daily turnover stood at 97.57 billion Taiwan dollars (3.21 billion US), compared with 121.14 billion dollars. Talks between Taiwan's Straits Exchange Foundation and China's Association for Relations Across the Taiwan Strait will be resumed on June 11-14. They are expected to become the theme of the market, Yuanta Securities Investment Consulting analyst Young Wang said. "The contacts are creating the room for expectations that Taiwan's economy will benefit from increasing business exchanges with China. Such hopes could trigger buying interest," Wang said. Both sides will focus on proposals to launch cross strait charter flights and allow more Chinese tourists to visit Taiwan.
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