Ample liquidity and a brighter economic outlook are expected to push Taiwanese stocks higher in the week ahead with a good chance of the TAIEX breaching 5,800 points, analysts said yesterday.
"The liquidity-driven rally in the past two weeks has yet to come to an end as upbeat investors are expected to pour more money into the market," said President Securities Corp (統一證券) analyst Alex Yeh.
"I expect the current upturn will persist since the market generally anticipates a turnaround of the economy next year," he said.
Other factors such as year-end corporate window-dressing would also lend support to the market, pushing the TAIEX to the 5,800 to 6,000 point level in the coming week, Yeh added.
But Entrust Securities Co (永昌證券) analyst J.C. Tan cautions the market, with little room for further upturn, may soon undergo a correction.
"There is not much room for more gains in the near term, particularly in the semiconductor sector," which was the biggest winner in the past two weeks, he said.
Optimism over a recovery in the semiconductor industry next year has already been factored in after the market garnered nearly 1,000 points since the beginning of December, Tan said.
Led by strong buying of technology shares, the TAIEX rose 152.80 points or 2.9 percent over the week to 5,486.73 yesterday after a 20.1-percent leap in the preceding week.
Ta Ching Securities Co (大慶證券) broker Daniel Liu said he expects the benchmark index to be in the range of 5,100 to 5,600 points in the near term.
"Recent volatility suggests the market has reached near-term resistance," Liu said.
"Moreover, foreign fund managers are expected to start going on holiday in the second half of the month, while window-dressing buying may also conclude soon," he added.
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