Taiwan stocks closed little changed on Thursday as state fund buying kicked in to prop up prices, recouping early losses as tech shares like UMC were hurt by falls on Wall Street.
The TAIEX ended up a slim 0.06 percent at 6,879.11 after losing about 2.5 percent since hitting a 41-month closing high last Thursday.
The index was still up 17 percent in 2004, making it one of the world's best performing stock markets this year.
"Any big fall is unlikely before the elections because the government is trying to boost investor confidence," said Albert Lin, vice president at Hotung Securities, referring to suspected buying by state-linked funds.
But turnover dropped to T$129.49 billion from T$169.03 billion in the previous session, reflecting a cautious mood ahead of the March 20 presidential elections.
United Microelectronics Corp (UMC), the world's No 2 foundry, fell 0.31 percent to T$32.50, while larger rival Taiwan Semiconductor Manufacturing Co (TSMC) rose 0.79 percent to T$63.50.
The offsetting results pinned the tech sector to a tiny 0.05 percent gain.
The financial sub-index inched down 0.03 percent.
Investors also loaded up with display screen and other chip issues on better earnings prospects this year.
Chunghwa Picture Tubes, the island's third-largest display maker and the market's most active issue, rose 0.45 percent to T$22.50 and rival Chi Mei Optoelectronics added 2.86 percent to T$54.00.
Nanya Tech, Taiwan's top memory chipmaker, jumped 4.8 percent to T$26.20 and ProMOS Tech was up 5.2 percent to finish at T$18.20.
The rises came despite the US Dow Jones wiping out this year's gains to end down 1.53 percent on Wednesday, hurt by a record US trade deficit.
The tech-laced Nasdaq slid 1.55 percent.
The over-the-counter TAISDAQ index rose 0.9 percent to 150.58, while March TAIEX index futures lost 0.12 percent to 6,922.