Taiwan share prices are expected to encounter pressure as the market moves closer to the nearest technical resistance at around 6,700 points, dealers said on Friday. Investors are likely to keep alert, as the bellwether electronic sector will release June sales results by the end of next week for a clear indication of global demand, they said.
After a Wall Street dive Thursday, market sentiment has turned cautious about the global economy with the US reporting a higher jobless rate for June, they added.
While profit taking may continue to impact the market ahead of 6,700 points next week, the bourse is expected to see technical support at around 6,350, dealers said. For the week to July 3, the weighted index rose 3.12 percent to 6,665,40 after a 3.37 percent fall a week earlier.
Average daily turnover stood at 107.42 billion Taiwan dollars (3.27 billion US), compared with 99.87 billion dollars a week ago. "Amid global economic woes, investors remain eager to look into how the world's high tech product demand is," Mega Securities analyst Alex Huang said. "The June sales data will serve as an important indicator to the outlook of the electronic sector which is the backbone of Taiwan's exports," Huang said.
Capital Securities analyst Chen Yu-yu agreed, saying high tech stocks may face relatively high pressure ahead of 6,700. "With daily turnover at low, the market is unlikely to break out of a consolidation mode. It is time for investors to adjust their electronic portfolios," Chen said.
However, Huang of Mega Securities said as the market pulls back, bargain hunters are expected to emerge. "Investors remain optimistic about closer cross strait business ties. Many of them believe that the market will gain further in the long run," Huang said.
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