The TAIEX ended 1.32 percent lower last week than the previous week following negative news from abroad, but analysts expect an upbeat performance this week, especially given the increasingly positive outlook for the local technology sector.
Concerns about Iceland’s volcanic ash, Greece’s budget deficit, fraud charges brought against Goldman Sachs and China’s efforts to rein in property prices, resulted in a 106.68 point fall on the TAIEX for the week.
Last Monday, the benchmark index fell below the psychological level of 8,000 points for the first time since March 31.
However, the TAIEX rallied during the week and reached 8,004.89 points at end of business on Friday, though still below its five-day moving average of 8,018.18 points and 10-day moving average of 8,025.69 points, according to data compiled by SinoPac Securities Corp (永豐金證券).
Jessica Huang (黃媺芸), chief investment officer in charge of ING’s mutual funds in Taiwan, said the rebound on Friday showed “a fast recovery in market confidence.”
Turnover was NT$605.872 billion (US$19.26 billion), up 4.99 percent from the previous week, stock data showed.
Huang said investors would enter the market when there was a correction in share prices. “Overall, the market has not lost its upward momentum, albeit weak in the near term,” she said.
Jih Sun Securities Investment Trust Co (日盛投信) chief investment officer Chang Tao-lang (張島郎) echoed Huang’s view, saying that the upside room for the TAIEX would be limited in the second quarter because of the smaller capital input.
In his note to clients on Friday, Chang said that over the next two weeks, investors would be placing their hopes on the release of strong first-quarter earnings by technology firms.
Among companies releasing first-quarter results this week are contract computer makers Quanta Computer Inc (廣達電腦) today and Compal Electronics Inc (仁寶電腦) on Wednesday. Results from contract chipmaker Taiwan Semiconductor Manufacturing Co (台積電) will be made available tomorrow and United Microelectronics Co (聯電) on Wednesday, with reports from PC vendors Acer Inc (宏碁) on Thursday and Asustek Computer Inc (華碩電腦) on Friday.
In addition, smartphone maker HTC Corp (宏達電) is scheduled to unveil its results on Wednesday, handset chip designer MediaTek Inc (聯發科) will provide earnings reports on Friday, while telecom operators Far EasTone Telecommunications Co (遠傳電信) and Chunghwa Telecom Co (中華電信) will post their numbers to the public on Tuesday and Friday, respectively.
In the short term, Huang said shares associated with LED applications and new Apple products, as well as those involved with replacement demand for notebooks and PC components deserve attention.
Chang suggested investors should focus on shares that will be impacted by supply shortages such as passive components, NOR flash chips, driver ICs and glass fabrics.
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