Taiwan share prices are likely to consolidate next week as investors wait for an offshore lead to confirm that the worst of the recent global sell-off is over and that it is safe to return to the market, dealers said Friday.
They said a key US employment report due later Friday is being looked to for a crucial lead on the outlook for the US economy after a series of weak data and much will depend on how Wall street reacts to the news.
If there is no major surprise either way, the market is likely to continue its guarded technical recovery, with investors taking profits at regular intervals to recoup some of their losses.
Market sentiment remains cautious and there is no clear sign that foreign investors will shift back to the buy side anytime soon after selling a net 30 billion dollars (912 million US) worth of stock in less than a week.
The market is expected to trade in a range between 7,450 and 7,650 points next week, dealers said.
For the week to March 9, the weighted index lost 61.95 points or 0.81 percent at 7,568.20 after a decline of 2.30 percent a week earlier. Average daily turnover stood at 113.43 billion dollars, compared with 116.95 billion dollars.
Yuanta Core Pacific Capital Management analyst Jacky Tam said a lot of investors had suffered losses in the market tumble and so whenever there is an upturn, they are very likely to try to take some money out.
At the same time, it is too early to say when foreign inestors will resume buying after their recent sell-off. "I expect the market to test 7,500 points again while it is in a consolidation mode," Tam said.
Eric Lee, an analyst with Taiwan International Securities, said regional and US markets remain a focus of local investors.