Taiwan stocks closed flat on Thursday amid caution over corporate earnings reports, while investors piled into big display screen makers like AU Optronics Corp on hopes of an industry recovery. The TAIEX ended up 0.13 percent at 5,842.76 on soft turnover of T$48.01 billion as investors retreated to the sidelines before a slew of Taiwan tech blue chips report fourth-quarter profits.
"I feel that the timing is not right. We've already seen the low point for the market but confidence is lacking," said Richard Tsai, vice president in charge of research at Grand Cathy Securities.
The index fell to its lowest close in nearly 3 months on Monday and the weak sentiment carried over even after US shares extended a rebound for a second day.
Meanwhile, analysts said investors were also reluctant to buy before the Chinese Lunar New Year holidays.
Taipei stock markets will be closed from February 4-13. AU, the world's third-largest maker of liquid crystal displays and the market's most active issue, finished up 0.45 percent at T$44.90 as investors bet screen prices were nearing the bottom. Smaller rival Chunghwa Picture Tubes Ltd.
Gained 1.52 percent to T$13.35 and Hannstar Display added 0.98 percent to end at T$10.30. The world's top contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC), edged up 0.41 percent to T$49.40.
After the close of trade, the firm posted its first quarter-on-quarter drop in profits in almost two years. Investors also awaited TSMC's guidance for this year.
"People want to see what TSMC says about the second quarter, whether capacity utilisation can begin rising in April or May like some foreign analysts say," Kathy's Tsai said.
The tech sub-index edged up only 0.12 percent, ignoring the US NASDAQ's 1.29-percent gain and the Philadelphia Semiconductor Index's 2.61 percent jump on Wednesday on unexpectedly strong results from Texas Instruments Inc.
On the non-tech side, investors also cashed out of the domestic demand shares like banking and construction that had led a market rally in December. Chinatrust Financial Holdings, which owns Taiwan's largest private bank, was off 0.28 percent at T$35.40, while blue chip builder Continental Engineering Corp.
Lost 3.61 percent to T$16.00. The over-the-counter market's TAISDAQ index inched up 0.08 percent to close at 109.08, while February TAIEX futures were down 0.1 percent to close at 5,834.