Taiwan share prices are expected to encounter selling next week as the bellwether high tech sector remains pressured on profit taking, dealers said on Friday. Investors, in particular, are watching closely how large cap electronic firms will report their earnings for the third quarter, aiming to pin down the path of global demand recovery, they said.
Concerns over possible volatility on Wall Street remain in place after the Dow Jones Industrial Average hit the 10,000 point mark, they added. The market's upside is expected to be limited with a cap at around 7,700 points, while any downside pressure may see technical support at 7,400, dealers said.
For the week to October 23, the weighted index fell 65.82 points or 0.85 percent to 7,649.28 after a 1.89 percent increase a week earlier. Average daily turnover stood at 123.52 billion Taiwan dollars (3.81 billion US), compared with 133.12 billion dollars the week before.
"Institutional investors' holdings in electronic firms remain high. It is possible for them to continue to cut positions for profit," Mega Securities analyst Alex Huang said. As the local high tech sector is highly correlated with its US counterpart, "any Wall Street volatility is likely to add pressure to the sector," Huang said. Huang said turnover may remain moderate so that the market is likely to move in narrow trade.
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