Taiwan share prices are expected to remain under pressure this week amid political uncertainties ahead of a mass rally planned against China's anti-secession law aimed at the island, dealers said. The law, which lays down the legal basis for Beijing to take military action in the event Taiwan moves toward independence, has raised the political temperature here and sparked widespread expressions of international concern.
Taiwan President Chen Shui-bian has condemned the law and called on one million people to take to the streets on March 26 to show their anger, which means the market will be held hostage to political developments for the week.
Dealers said the passage of the anti-secession law last week coincided with, and may even have sparked, massive foreign investor sales to take advantage of the recent run up in the Taiwan dollar.
This selling could continue for some time, leaving the market vulnerable as it trades just above the key 6,000 points level, they said.
"Both foreign and local investors were selling, mainly the electronics heavyweight, to avoid further losses in the current negative political atmosphere," said analyst Huang Hsun-huei at Capital Securities.
"Record crude prices and declines at the Wall Street will also discourage position-building next week," Huang said.
Petrochemicals, however, would benefit from rising oil prices next week and select smaller caps could also attract investors, Huang added.
For the week to March 18, the weighted price lost 160.28 points or 2.58 percent to 6,043.95 after a 0.17 percent rise the previous week.
Average daily turnover dropped to 68.00 billion Taiwan dollars (2.19 billion US) from 86.60 billion dollars.
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