Taiwan share prices are expected to continue firmer next week, sustaining recent momentum on continued foreign investor interest, especially in the key electronics sector, dealers said Friday.
They said Taipei has been a laggard to sharp gains in the regional markets recently and so should continue to enjoy support as it catches up.
Semiconductor manufacturers, integrated circuit packaging and testing firms, and cell phone related product makers are likely to remain the favourites of foreign investors on improving sales, they said.
Flat panel display producers are expected to attract foreign buying too on their relatively low share prices, while the steel stocks may attract support given their rising product prices.
However, technical pressure may emerge as the market moves closer to the key psychological level of about 6,900 points, giving a trading range next week of between 6,700 and 6,900.
For the week to April 7, the weighted index closed up 167.97 points or 2.54 percent at 6,781.94 after a 3.72 percent gain the previous week.
Average daily turnover stood at 109.44 billion Taiwan dollars (3.39 billion US), up from 86.82 billion dollars.
"The local bourse has scored gains for 10 sessions in a row. The market has become technically strong on the support of foreign capital inflows," Fubon Securities Investment Services analyst Daniel Tseng said.
Tseng said more and more foreign investors are allocating funds to Asia as markets like Japan and Hong Kong have recently outperformed their western counterparts.
"Compared with Japan, Hong Kong and even South Korea, Taiwan is still lagging behind. I expect Taiwan to benefit from the current foreign capital inflows into Asia," Tseng said.
Capital Securities analyst Huang Hsun-hui said he prefers to be cautious following recent significant gains, adding it will be no surprise for the market to encounter some profit taking pressure next week.
"April is the first quarter results reporting season for high tech companies in Taiwan and the US. Investors had better watch closely," Huang said.
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