Taiwan share prices are expected to stage a technical rebound on hopes that investors continue to take advantage of cheap electronics, dealers said on Friday. With the Thanksgiving holiday coming, Wall Street is likely to turn quiet next week to leave the local bourse breathing space after recent steep declines, they said.
But concerns over domestic an global economic conditions are expected to cap the upside. For the week to November 21, the weighted-index closed down 281.60 points or 6.32 percent at 4,171.10 after a 6.11 percent decline a week earlier.
Average daily turnover stood at 47.71 billion Taiwan dollars (1.42 billion US), compared with 51.87 billion dollars.
The market made a comeback Friday, closing up 1.98 percent, as bargain huntingg reversed early heavy losses "The market just kicked off a rebound and with depressed share prices, the momentum is unlikely to stop here," Mega Securities analyst Alex Huang said.
Huang said the bellwether electronic sector is likely to take the lead in the upside. "Large-cap electronics had been battered. The recent selling had fully reflected the sector's fundamental weakness expected for the first half of next week," Huang said.
Taiwan International Securities analyst Arch Shih agreed, saying foreign institutional investors have resumed buying into the sector, helping to stabilise the broader market. He said interest may also focus on stocks with close business ties with China on optimism towards the mainland domestic market. However, Shih said it is unlikely for the market to ride out the current bearish sentiment as trading volume remains at relatively low levels.
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