Taiwan share prices are expected to stage a technical rebound next week after a roller-coaster ride amid concerns about the outlook for Wall Street in the face of growing problems in the US home loan market, dealers said Friday.
Rotational interest is likely to dominate, with the bellwether electronic sector and financial heavyweights to draw more attention following their recent steep declines, they said. While technical factors may bring an end to recent market volatility, resistance around the 9,300-9400 point level is expected to hamper any rebound, with pressure from mutual fund redemption remaining in place, they added.
For the week to August 3, the weighted index closed down 104.46 points or 1.14 percent at 9,057.82 after a 4.42 percent fall a week earlier. Average daily turnover stood at 219.94 billion dollars (6.69 billion US), compared with 273.99 billion dollars a week ago. "Following heavy losses in the past two weeks, the market may manage to stabilise to some extent. A technical rebound is possible," Capital Securities analyst Hank Chen said.
Chen said strong buying Thursday and Friday after gains on Wall Street helped ease some of the prevailing concerns and another solid US performance would be positive. However, Allen Lin, an analyst with Concord Securities, said the recent heavy selling has prompted mutual fund redemption and the market still needs some time to absorb that pressure.
"Such fund redemption pressure is likely to limit the upside ... The nearest cap may be seen around 9,300 points, while it is also likely for the market to dip and test 9,000 points again," Lin said.