Taiwan share prices closed 1.07 percent higher with sentiment buoyed by Wall Street's firmer tone overnight, dealers said yesterday.
Dealers expected TAIEX share prices to stage a technical rebound next week after recent heavy losses, but gains could be capped amid concerns over the US economic outlook and political uncertainty at home.
The weighted index (TAIEX) closed up 84.36 points at 7,941.44, off a low of 7,810.27 and a high of 8,006.56, on turnover of NT$100.44 billion (US$3.09 billion).
Investors were likely to become more cautious ahead of a high court ruling due on Dec. 28 on opposition Chinese Nationalist Party (KMT) presidential candidate Ma Ying-jeou's (
The decision will determine whether Ma can remain in the presidential race.
Taiwan has scheduled parliamentary polls on Jan. 12 and presidential elections on March 22.
Any upside may face resistance at about 8,200 points, while the market was expected to see support if the index falls to 7,800 points, dealers said.
The weighted index closed down 176.64 points or 2.18 percent at 7,941.44 for the week after a 6.93 percent drop a week earlier.
Average daily turnover stood at NT$112.16 billion(US$3.45 billion), compared with NT$113.63 billion a week ago.
"The market has been oversold. Technically speaking, it is time for a recovery," Capital Securities (群益證券) analyst Huang Hsun-hui said.
Huang said large cap stocks stood a better chance of attracting buying interest from institutional investors due to healthy fundamentals, while a high amount of margin trade could destablize smaller capitalized shares.
However, concerns over the upcoming parliamentary and presidential elections in Taiwan and a possible further deterioration of the US credit market would continue to weigh on the local market, Huang said.
"The high court ruling on Ma's case will be watched closely next week with many investors reluctant to push share prices higher despite a technical rebound," Huang said.
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