Taiwan share prices are next week expected to feel the impact of mounting pressure for President Chen Shui-bian to step down over scandals involving his family, dealers said Friday.
They said the market may extend gains on technical rebounds in the first half of the week. But investors are likely to turn cautious as Shih Ming-teh, a former chairman of Chen's ruling Democratic Progressive Party, is expected to lead a sit-in from Wednesday calling for the resignation of the president.
However, ample liquidity is likely to trigger rotational interest in non-tech stocks and lend some support to the market.
The market is expected to move between 6,680 points and 6,850 next week.
For the week to August 18, the weighted index closed up 149.98 points or 2.28 percent at 6,721.08 after a 1.99 percent rise a week earlier.
Average daily turnover stood at 89.17 billion Taiwan dollars (2.73 billion US), following an average of 78.17 billion dollars a week ago.
Concord Securities analyst Allen Wu said local and foreign institutional investors were expected to pick select electronic property and tourism stocks taking advantage of low valuations after their recent downside.
"But, political concerns are expected to compromise the earlier buying interest ... Investors may be turned away if Shih's sit-in creates further repercussions," Wu said.
"I expect the market to have a good first half of next week. However, don't chase prices without thinking twice," he added.
Yuanta Core Pacific Capital Management analyst Jacky Tam said the market basically would remain in range bound trade.
Tam said many investors prefer to take to the sidelines before more corporate half-year earnings results are due later this month, adding worries over corporate fundamentals loom large.
"It is not easy for the market to overcome technical resistance at around the level of 6,800 points. The market is likely to test 6,600 next week," Tam said.