Shares closed more than 100 points higher yesterday on strong foreign investor buying, but no clear picture emerged for the stock market's likely movement today, as analysts remain concerned over post-election uncertainty in the US.
The benchmark TAIEX gained 103.24 points, or 1.79 percent, to close at 5,862.85. The market opened flat and closed at the highest point, with US President George W. Bush's leading his Democratic counterpart, Senator John Kerry.
"If Wall Street is jittery over the hotly-contested election, then Taiwan's stock market is likely to be impacted," said Stanley Yeh (
Foreign institutional investors yesterday bought a net NT$13.93 billion worth of Taiwan stocks, in anticipation of a proposed weighting-increase of Taiwan shares by Morgan Stanley Capital International (MSCI) by the end of the month.
The MSCI effect can be seen in the heavily-weighted electronics sector, which attracted buying from foreign investors and was up 3.02 percent yesterday, said Dave Chou (周顯黎), another analyst at Yuanta Core Pacific Securities.
Oil prices, Taiwan's year-end legislative elections and the verdict today on a lawsuit filed by opposition parties to suspend Chen Shui-bian's (
By and large, who is in the White House has little impact on local bourse and US-Taiwan trade prospects, Chou said.
As for how the US Presidential election results are going to affect Taiwan's economy, George Lin (
But Minister of Economic Affairs Ho Mei-yueh (
The minister further predicted that once the new US president officially assumes office, Taiwan-US economic and trade relations will improve. Taiwan is the eighth-largest trading partner of the US.
Wang Chun-jieh (
But he added that if Bush wins a second term, the two countries will be more likely to re-open the TIFA talks based on the existing model.