Taiwan stocks fell 0.62 percent on Tuesday, weighed down by losses for tech heavyweights like TSMC as investors awaited June sales results to judge the strength of the tech sector's recovery. The main TAIEX share index ended down 39.16 points at 6,232.04, retreating further from a near 14-month closing high set on June 23.
Turnover was flat from the previous session at T$68.18 billion ($2.14 billion), reflecting the cautious mood.
"The market lacked momentum to attack because we think few companies will release good sales figures," said Albert Lin, vice president at Hotung Securities.
The electronics sub-index fell 0.27 percent as Taiwan Semiconductor Manufacturing Co (TSMC), the world's top contract chip maker and the market's most heavily weighted stock, dropped 1.27 percent to T$54.40.
Smaller rival United Microelectronics Corp (UMC) shed 1.70 percent to T$23.10.
Analysts say tech sales in June, due out by July 10, are likely to be weak amid seasonally slow manufacturing in the second quarter.
But it is widely expected that the tech sector has hit bottom after a one-year slump caused by weak demand and excess inventories. On the bright side, big exporters defied the weakness in the tech sector on hopes that a weaker local currency could generate foreign exchange gains.
Laptop computer maker Compal Electronics Inc rose 0.98 percent to T$30.90 and computer motherboard maker Asustek Computer Inc added 0.44 percent to T$91.50.
The Taiwan dollar hit a three-month closing low against the US dollar on Monday.
Opto Tech, the market's third most active issue in terms of volume, jumped 3.32 percent to T$10.90 as investors bet on growing demand for the light-emitting diodes (LEDs) it makes for consumer products.
Cathay Financial Holding finished flat at T$60.70 but the stock rose as much as 1.8 percent in early trade, reflecting an ex-dividend share price adjustment on Tuesday. The US stock market was closed on Monday due to Independence Day.
The over-the-counter market's TAISDAQ index rose 0.31 percent to close at 124.65, while July TAIEX index futures lost 0.77 percent to 6,163.