Taiwan stocks are likely to move higher this week with an expected increase in US interest rates not seen unnerving the market, although some high tech stocks may be sold after Intel recalled a number of chipsets.
The benchmark TAIEX gained 4.2 percent to end at 5,802.55 last week, advancing in the last three sessions after days of see-sawing around 5,600 points as the market regained enough confidence to hunt for electronics bargains.
"If the Fed raises rates by 0.25 percentage points like everyone expects, we will have no negative news on the economy hanging over the market for the short term," said Richard Tsai, senior vice president in charge of research at Grand Cathay Securities.
Taiwan's central bank, which often moves in line with the Fed to keep the Taiwan dollar exchange rate steady, left rates unchanged at its quarterly board meeting on Thursday last week.
Foreign investors also accumulated T$12.95 billion (US $384 million) in local stocks last week, raising hopes that tech valuations were attractive to overseas fund managers once again after heavy foreign selling helped knock the TAIEX to a nine-month low in mid-May.
However, tech firms lower on the production chain may get off to a poor start next week after semiconductor giant Intel Corp recalled an unspecified number of chipsets, code-named "Grantsdale", on Friday due to a production flaw.