Taiwan share prices are expected to extend momentum, as the market is full of liquidity with bargain hunters eager to take advantage of low valuations, dealers said Friday. The market is expected to test 4,700 points next week, while the market is likely to see support at around 4,400 points as investors pocket profits, they said.
For the week ended February 27, the weighted index rose 120.21 points or 2.71 percent to 4,557.15 after a 3.35 percent fall the previous week. Average daily turnover stood at 62.53 billion Taiwan dollars (1.79 billion dollars US), compared with 65.84 billion dollars a week ago.
"After the central bank repeatedly cut its key interest rates, the market is immersed with idle money. Many investors are seeking buying opportunities," Grand Cathay Securities analyst Mars Hsu said. Last week, the central bank slashed rates for the seventh time in four months to boost the domestic economy, which contracted 8.36 percent in the fourth quarter of 2008.
"Electronics stocks may have a better chance to gain as major companies have received large orders from China. It is an encouraging sign," Hsu said.
However, Mega Securities analyst Alex Huang said investors were showing signs of wariness. "Daily trading volume remained moderate, showing many investors have been reluctant to chase prices on fears of steep declines in US markets," Huang said.