Taiwan share prices are expected to continue higher on the back of ample liquidity, dealers said. They said the key electronics sector, which led this week's gains, may run into technical resistance levels but investors will likely rotate through the market for other stocks.
Given adequate liquidity, the market stands a good chance of testing the key 9,000 points level next week after repeatedly hitting seven-year highs. Technical support stands at around 8,700 points. For the week to June 22, the weighted index closed up 272.75 points or 3.18 percent at 8,846.39 after a 3.29 percent rise the previous week.
Average daily turnover rose to 187.92 billion dollars (5.71 billion US) from 141.34 billion dollars. "The expansion in volume indicates more and more investors were willing to pour their money into the market. It is a positive sign and I don't think the trend will stop just there," President Securities analyst Johnny Lee said.
A dealer with a regional brokerage agreed, saying: "The higher daily turnover, the more likely for the market to break technical resistance ahead of 9,000 points soon."
The dealer said foreign investors may continue to play a big role in the local market's gains as they are hungry for cheap targets, including many in Taiwan which has generally lagged the region. However, Lee said a stronger local dollar, after the latest rate hike, could hit exports and the electronics firms who count among the island's biggest and most export-orientated companies.
"It is possible that investors will stay away from electronics, Taiwan's major export items, for a little while. Funds may turn to financial and property stocks which depend on domestic demand," Lee said.
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