Taiwan share prices are expected to move within a narrow range after steep declines amid political anxiety as parliamentary and presidential elections draw closer, dealers said on Friday.
Political uncertainty has prompted foreign institutional investors to unload holdings, while a massive amount of margin trade has further destabilised the market, they said.
Lingering concerns over a possible credit crunch and an economic slowdown in the US are likely to further undermine investor confidence, they added. The market was likely to test the critical 8,000 point level next week with some technical support at around 7,800 points.
For the week to December 14, the weighted index closed down 604.08 points or 6.93 percent at 8,118.08 after a 1.58 percent rise a week earlier. Average daily turnover stood at 113.63 billion Taiwan dollars (3.52 billion US), compared with 108.92 billion dollars a week ago.
"As long as political anxiety persists, there is little chance fohe presidential poll March 22. Tensions between the ruling Democratic Progressive Party and the major opposition Kuomintang is escalating. A dealer with a regional brokerage said amid weak market sentiment, fund managers were reluctant to boost share prices to dress up their books at the end of year.
"I expect the market to test 8,000 points next week. Once the index fails to hold itself above that level, it may continue downside to 7,800 points," the dealer said. The integrated circuit design stocks were likely to suffer greater pressure due to relatively higher valuations, he added.
Comments
Comments are closed.