Taiwan share prices are expected to extend gains as investors continue confidence after the market hit a seven-year high this week, dealers said Friday.
Adjusting their portfolios, foreign investors should remain buyers in the financial sector, a market laggard, on optimism over profitability of insurance companies, which will be allowed to raise overseas investments after a regulaory change, they said.
However, the gains may be limited, with the market closed Tuesday for a public holiday, with the trading range put at between 8,500 and 8,700 points. For the week to June 15, the weighted-index closed up 272.93 points or 3.29 percent at 8,573.64 after a 0.62 percent gain the previous week.
Average daily turnover stood at 141.34 billion dollars (4.27 billion US), compared with 135.15 billion dollars a week ago.
"Foreign investor buying has been the theme behind the recent gains. Optimistic foreign investors are expected to continue their purchases by rushing to pick up lagging financial stocks," Yuanta Core Pacific Capital Management analyst Jacky Tam said.
"With the market hitting a new seven-year high boosted by foreign institutional investors, more and more retail counterparts are expected to follow suit," Tam said.
Tam said personal computer makers and related component manufacturers are expected to benefit from the latest support as the electronic sector will enter its peak season in the second half of the year.
However, Mega Securities analyst Alex Huang said he expects the market will encounter technical resistance soon after the index rises above 8,600 points.
"Few can be sure how Wall Street will perform during the upcoming holidays in Taipei. Uncertainty over interest rate movements remain," Huang said.