Taiwan share prices are expected to rise next week on hopes that the island's ties with rival China will improve after the March 22 presidential election, dealers said. Many investors were buying stocks betting that the Kuomintang, which favours better ties with China, will win the vote, dealers said.
The strong Taiwan dollar against the greenback also attracts foreign funds into the local market, they added. Ample funds are expected to help the market to challenge 8,800 points next week, with downside support at around 8,400 points, they said.
For the week to March 7, the weighted index closed up 118.62 points or 1.41 percent at 8,531.38 after a 3.75 percent increase a week earlier. Average daily turnover stood at 167.44 billion Taiwan dollars (5.44 billion US), compared with 170.95 billion dollars a week ago.
However, Hsu said investors had better avoid financial stocks on fears that they will report foreign exchange losses on the Taiwan dollar's appreciation. "In the past few weeks, the local market has gained substantially. I do not rule out the possibility that profit taking pressure will emerge as the weighted index comes closer to 8,800 points," Hsu said.
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