Fubon Asset Management is expecting the TAIEX to undergo a correction period after the index breached the 8,000 mark earlier this week.

"Investors who failed to take advantage of the recent rallies on the local bourse had better adopt a cautious approach," Fubon Asset Management chairman, Thomas Tsao, said during a media briefing earlier this week.

Tsao said their assumptions were based on a lack of strong domestic economy fundamentals and an over-reliance on exports to the US.

Downside risks are still lurking due to a fragile recovery in the US and growing inflationary pressure.

There are 80 live products which include the TAIEX in their underlying baskets, according to the SRP database. The majority of the products are built with bullish payoffs, with 43 products using uncapped calls, a dozen with knockouts, 11 capped calls and five products with digital payoffs.

The first due to mature is Noble Bank's Nawigator Zysków, a four-year capital-protected growth product with a life insurance wrapper. Structured with a best-of option and uncapped call payoff, it provides between 52% and 74% of its better performing portfolio on top of initial capital on maturity, and sold PLN6m ($1.9m).

Bank of America Merrill Lynch has not jumped on the bandwagon yet and is waiting for second half guidance from major Taiwanese technology companies, before determining any shifts in the benchmark index.

"Since the market generally expects the global economy in the second half of the year to be better than that in the first half, major technology players' guidance for the second half will be the most important factor for either driving up or striking down sentiment in the stock market," Taiwan-based Merrill Lynch equity strategist Katherine Hu stated, according to local reports.

Hu expects the TAIEX to hit 8,600 points by year end if the news from tech companies is positive, or to settle at around 8,000 points for the rest of the year if the outlook is not.

She said the re-inauguration of President Ma Ying-jeou in May and prospects for further rapprochement would lift sentiment in the financial sector.

These products are available across the Americas, Asia-Pacific and European databases.