Taiwan share prices are expected to gain further on a continued technical rebound after heavy losses in the past few weeks, dealers said on Friday. Bargain hunters are likely to turn active to boost the index as they are trying to rebuild positions following a sell-off, they said.
A stronger China market may lift investor confidence on hopes that the nation will serve as a cushion to the global economic woes, while Wall Street has shown its resilience after recent falls, they added.
Financial stocks are likely to outperform the broader market on expectations that Taiwan and China will sign a memorandum of understanding in late June or in early July for increasing cross strait banking activities, they said. The market is expected to challenge the nearest technical resistance of the 6,450-6,500 point range next week, any downside may be cushioned by a support at around 6,100 points, dealers said.
For the week to June 19, the weighted index fell 217.08 points or 3.37 percent to 6,231.15 after a 5.96 percent fall a week earlier. Average daily turnover stood at 99.87 billion Taiwan dollars (3.04 billion US), compared with 133.25 billion dollars a week ago. "The technical rebound started from Friday and the momentum accelerated until the end of the session. I expect more will follow as more bargain hunters are ready," Grand Cathay Securities analyst Mars Hsu said.
Hsu said he expects interest will focus on the financial sector. In addition, he said panel makers and microchip designers may benefit from a recent revival of demand.