Taiwan stocks edged slightly higher on Tuesday as major technology shares held firm thanks to Wall Street's staunch advance in the face of high oil prices and warnings of an al Qaeda attack on a big financial institution.
Advanced Semiconductor Engineering, the world's largest microchip packaging and testing firm, added 1.35 percent amid expectations the firm will report strong results at its second quarter earnings announcement later in the day.
The TAIEX share index gained 0.31 percent, to close at 5,367.22, nudging higher after giving up 1.29 percent in the previous session, though the index remains close to a near one-year low.
"Certainly the US market's lack of fear over the terror attack is a factor," said Richard Tsai, a vice president at Grand Cathay Securities. "If the target nation is not worried, why should we?"
"When the technology sector is bad, investors tend to sell all sectors and there is a strong possibility that our financial and raw materials stocks are undervalued," Tsai said.
Industrial shares were the day's strongest gainers, with Taiwan Cement, the island's largest cement maker, adding 4.67 percent. Sector heavyweight China Steel added 1.69 percent, after posting a 53 percent jump in July pre-tax profit.
AU Optronics, the world's third largest display panel maker, gained 2.40 percent. Taiwan Semiconductor Manufacturing Co, the world's largest contract chip maker and Taiwan's most heavily weighted share, rose 1.4 percent.
However, memory chip makers remained under pressure on fears that weak back-to-school demand for personal computers will erode product prices. Powerchip Semiconductor was the most heavily traded share, losing 4.89 percent.
Overall market turnover was light at T$44.9 billion, though that was up from T$41.8 billion in the previous session. The over-the-counter market's TAISDAQ index slipped 1.11 percent, weighed down by Powerchip's losses, while August TAIEX futures edged up 0.04 percent to 5,282.