Taiwan share prices are expected to stage a technical rebound next week, but with foreign investors still sidelined, the upside may be capped at around the 9,000 point level, dealers said Friday. Market sentiment has turned cautious ahead of the May 20 inauguration of president-elect Ma Ying-jeou, who has promised to improve cross-strait ties, they said.
After two weeks of consolidation, tourism and asset-backed stocks may attract more interest, lending the broader market support at 8,700 points. For the week to May 9, the weighted index close down 171.24 points or 1.91 percent at 8,792.39 after a 0.18 percent increase a week earlier.
Average daily turnover stood at 142.84 billion Taiwan dollars (4.64 billion US), compared with 154.90 billion dollars a week ago. "A rebound is possible next week but it will be just technical in nature. Cautious sentiment towards relations across the Taiwan Strait will continue to dictate the market," Grand Cathay Securities analyst Mars Hsu said.
Hsu said many foreign investors to retreated from the trading floor after Ma named a pro-independence politician to head the Mainland Affairs Council, a China policy making body. In addition, foreign investors are cutting positions in high tech stocks, which reported lacklustre earnings for the quarter to March, he said.
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