The local bourse is expected to deliver red envelopes with bullish sentiment and robust performance when the market reopens today after the eight-day Lunar New Year break, bolstered by vigorous international markets and healthy industry fundamentals, analysts said yesterday.
"It is highly likely that the stock market will continue with the bullishness prior to the holiday and see a rise in the benchmark index," said Jones Wang (王源錦), a deputy manager at Jih Sun Securities Investment Trust Co (日盛證券投信).
Wang predicted a surge of possibly 100 points in the benchmark TAIEX today.
Bullish international markets in the US and Japan over the Lunar New Year holiday, together with strong capital momentum and healthy fundamentals in the nation's high-tech sector, would beef up the local market, Wang said.
The TAIEX jumped 80.24 points, or 1.25 percent, to close at 6,532.18 on Wednesday last week, the last trading day before the Lunar New Year break.
Foreign investors have bought a net of NT$37.86 billion (US$1.18 billion) since the beginning of last month.
Japan's Nikkei 225 Stock Average yesterday closed up 1.4 percent at 16,710.55, reaching its highest level since September 2000 and leading gains in Asian markets after crude oil fell and the US dollar strengthened.
The US' Dow Jones Industrial Average ended a two-day decline and closed up 89.09, or 0.8 percent, to 10,953.95 on Wednesday after Boeing Co, the world's second-largest commercial aircraft maker, raised its profit forecast. The closing index represented a surge of 241.73 points over the course of the Taiwan stock exchange's eight-day break.
Despite the seemingly promising outlook, the potential impact on investment confidence caused by Fubon Asset Management Co's (
Fubon Asset Management, the nation's largest securities investment trust company, which manages 23 funds reportedly worth NT$158.3 billion, was fined NT$3.6 million by the Financial Supervisory Commission last Friday for violating regulations on investment trusts.
Political issues, however, will have little impact on the local stock market for the moment despite President Chen Shui-bian's (陳水扁) move to abolish the National Unification Council and unification guidelines because a specific policy has yet to be confirmed, said George Hou (侯明甫), chief investment officer at JF Asset Management (Taiwan) Ltd.
Chen raised the proposal during his latest Lunar New Year address, but Washington said the move could disrupt the cross-strait status quo.
High-tech stocks remain the top pick for analysts, and Hou suggested buying shares in thin-film-transistor liquid-crystal-display players, handset makers, as well as their component suppliers who are expected to benefit from slowing consumption of flat panel TVs and low-end and third-generation mobile phones, he said.
RSS