Taiwan share prices are expected to turn quiet in the shortened trading week ahead of the prolonged Lunar New Year holiday, dealers said Friday. Investors may closely watch how Barack Obama deals with the dismal economic conditions after he is sworn in as US president on January 20, they said.
During the current quarterly earnings reporting season in the United States, market sentiment is likely to remain cautious on fears that more disappointing corporate news will emerge to trigger further falls in shares, they added.
The market is expected to encounter technical resistance at around the 4,400-4,500 point range, while there may be a floor at 4,200, they said. In the week to January 16, the weighted index fell 113.83 points or 2.55 percent to 4,353.70 after a 2.69 percent fall a week earlier. Average daily turnover stood at 53.48 billion dollars (1.61 billion US), compared with 70.69 billion dollars a week ago.
There will be only three trading sessions left for next week before the Lunar New Year holiday begins. The market will open on Saturday to make up for fewer trading days next week due to the new year holiday, which will end on February 1. "I do not expect any breakthrough in the only three trading sessions next week. Daily turnover may continue to fall accordingly," Taiwan International Securities analyst Arch Shih said.
"Many investors are reluctant to keep their holdings before the prolonged new year holiday as they fear that Wall Street will move take a dive during the holiday on possible negative macroeconomic and corporate news," Shih said.
Institutional investors may keep selling financial stocks amid concerns over possible bad loan provisions on business closures, while electronic shares may benefit from short covering, dealers said.
"In particular, interest in flat panel makers may extend into next week as they have just begun a technical comeback on cheap valuations. The market is hoping they can win orders from China," Shih said.