Foreign buying expected to boost stocks

Share prices are expected to extend gains into this week on continued ample liquidity as foreign investors keep pumping funds into the market, dealers said on Friday.

Optimism over international demand next year for the high tech products which Taiwan exports has triggered further foreign buying in local stocks, they said.

While profit-taking cannot not be ruled out after a recent strong showing, the current uptrend remains intact, they added, with the market likely to trade between 7,500 and 7,700 points this week.

For the week to last Friday, the weighted index closed up 186.21 points or 2.51 percent at 7,613.57, after a 2.31 percent gain a week earlier.

Daily average turnover stood at NT$124.77 billion (US$3.86 billion), compared with NT$107.26 billion.

"The recent gains were largely driven by adequate liquidity. With a continued presence of foreign investors, high fund positions are expected to fuel more interest," National Investment Trust Co (建弘投信) analyst Hank Chen said.

Dealers said foreign interest has been boosted by a relatively low local valuations after the market lagged its regional and US peers in recent months.

"Local shares still look attractive despite the recent gains," Chen said.

He said the fact that share prices are climbing step-by-step instead of jumping ahead in a short period encourages expectations of further gains.