Taiwan share prices are expected to trade range bound next week as investors take to the sidelines with electronic manufacturers and inventory levels providing a focus, dealers said Friday.
They said trade would also be slow as foreign fund managers takeoff on vacation for summer holidays, while local fund managers wait for further leads.
Soaring oil prices amid an unstable geopolitical climate after North Korea's missile tests has also dampened sentiment on fears that rising energy costs will boost inflation and damage domestic growth.
For the week ending July 7, the weighted index closed down 43.80 points or 0.65 percent at 6,660.61 and is expected to move between 6,550 points and 6,750 in the week ahead.
Average daily turnover stood at 76.13 billion Taiwan dollars (2.35 billion US), following an average of 88.69 billion dollars a week earlier.
"Judging by recent market movements, I think investors have been taking a break from trading on a lack of incentives ... The way the electronic sector consumes inventories may serve as a key factor to prompt investors to trade," Yuanta Core Pacific Capital Management analyst Jacky Tam said.
Tam said electronic firms were slashing prices to alleviate the inventory impact, adding flat panel display and cell phone set makers are suffering from surplus inventories.
An analyst with a European brokerage said as an energy importer, Taiwan remained under pressure from the already high cost of crude oil.
"The missile tests by North Korea have added fuel to the global oil market, further adding to worries over regional security. It is definitely unfavourable to the island," he said.
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