TAI PEI: The local equity market is expected to see support despite recent volatility on Wall Street as the local economy remains on the path to recovery, and that could improve listed companies’ bottom lines this year, analysts said Saturday.
They said the benchmark Taiwan Capitalization Weighted Stock Index (Taiex) on the main board is likely to see its nearest technical support at around the 120-day moving average of 10,693 points, and even if the market suffers further losses the next technical support could be seen at about the 240-day moving average of 10,430 points.
On Friday, the Taiex fell 87.62 points, or 0.81 percent, to close at 10,698.17, but came off an early low of 10,638.98. The local market appeared relatively resilient as the fall followed a 420 point plunge by the Dow Jones Industrial Average a day earlier, when U.S. President Donald Trump announced Washington will impose tariffs on steel and aluminum imports as early as next week.
Nomura Asset Management Taiwan said continued growth in the global economy is expected to prompt investors to pour more funds into equity markets, which should benefit Taiwan, adding liquidity-driven gains could continue to be the theme of the local stock market.
Liao said tech stocks focusing on cloud-based servers, 3D sensors, application-specific integrated circuit (ASIC) chip technologies as well as 5G development, could have a better chance of standing out in the market as these technologies have gained in popularity in applications throughout the global market.
