Taiwan's share market is likely to slide for a seventh straight month in October amid fears of a US-led war against Iraq and a weak local economy but stocks could bottom out during the final quarter, analysts said.
While there seems no hope of an imminent turnaround in weak business and economic conditions, investors are hoping for a return of buying by foreign investors who have been mostly selling since May, they said.
TAIEX closed at 4,191.81 on Monday -- the lowest level since November -- and analysts say it could slip as low as 3,600 points this month.
Fuh Hwa Capital Management (
"Based on historical experience, the market had sustained six straight monthly declines only twice over the past 15 years. There is no reason why the market should do even worse this time."
But the market appears poised for a further decline towards 3,600 points in the near term as foreign investors continue cashing out to meet fund redemptions at home, he said.
A fund manager with a foreign house agreed the share market was likely to head lower.
"All we have now is a good number of uncertainties led by a US-led attack on Iraq as well as a still far from reassuring fundamental outlook. On the other hand, there is simply no catalyst in sight to justify bargain-hunting, let alone serious buying for the medium to long term," she said.
Foreign equity markets led by Wall Street are still under pressure and Taiwan is facing a weakening economic recovery.
RSS