Taiwan share prices are expected to consolidate next week after recent heavy losses on persistent concerns US interest rates will rise further even at the risk of dampening growth, dealers said Friday.
They said sentiment is cautious after a bruising week, with added pressure coming from uncertainty about the future of President Chen Shui-bian, who faces growing corruption scandals embroiling his wife, son-in-law and top aides.
Should there be a technical recovery, any gains will likely be limited as chastened investors will be reluctant to take any risks after the recent roller-coaster ride.
Dealers put next week's trading range at 6,300 to 6,550 points.
For the week to June 9, the weighted index closed down 515.01 points or 7.4 percent at 6,444.63 after a 1.16 percent increase a week earlier.
Average daily turnover stood at 102.95 billion Taiwan dollars (3.17 billion US), up from 94.09 billion dollars.
"Following the recent dive, the market ... needs some time to consolidate before any turnaround," Yuanta Core Pacific Capital Management analyst Jacky Tam said.
Huang Hsun-hui, an analyst with Capital Securities, agreed, saying that because many local retail investors are still under pressure to meet margin payments, they are likely to seize on any technical rebound to sell out and so limit their losses.
"Long-term investors should be patient. Do not expect any immediate take-off," Huang said.
Tam of Yuanta Core Pacific said the attitude of foreign investors remains crucial, given their fears US interest rates will go higher and crimp US growth.
While Tam said electronic heavyweights look attractive after the recent heavy losses, Huang of Capital Securities said he prefers "China chips" - companies which have close business ties with China and are expected to benefit from the strong economic showing on the mainland.
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