Taiwan stocks ended little changed in sluggish trade on Monday with weak banking shares offsetting a modest rebound in tech issues like AU that had pushed the market down to a 3-1/2 month low close last week.
The benchmark TAIEX share index ended up 0.07 percent at 6,035.59 points, with a cautious mood pervading despite solid technical support at the 6,000 point level.
Screen maker AU Optronics Corp helped to prop up the index with a 0.58 percent gain to T$43.50, after falling 2.81 percent on Friday and dropping the 7 percent limit on Thursday.
But analysts said they had been hoping for a bigger bounce after US stocks gained ground on Friday and oil prices eased.
"The display screen sector is still a benchmark for electronics sentiment and it is not rebounding very strongly. It affected the mood in the electronics sector," said Roger Lin, a deputy research manager at Pacific Securities.
"Turnover is just too low. There is little desire to slash the index lower than 6,000, but with this turnover, there is no chance to get past resistance" at 6,150 points, he said.
Turnover slipped to T$46.28 billion, from the previous session's T$60.61 billion, to its lowest since late April. Investors stuck to the sidelines, waiting for more corporate news and hints about fundamentals, analysts said.
Steel shares also advanced amid hopes that US reconstruction from Hurricane Katrina would lift global steel prices. China Steel Corp ended 2.23 percent higher at T$29.75 and was the day's third most actively traded issue.
Banking stocks dragged on the market, however, as investors remained disappointed by the government's failure to auction off Taiwan Business Bank to a big financial holding company last week.
"The government has not taken a second step after the auction failed, and people are disappointed that there are no new moves to consolidate the banking industry," said Alex Huang, a vice president at Barits International Securities.
Taiwan Business Bank was the most active issue and lost 4.55 percent to end at T$8.82, while Taishin Financial Holding Co was second on the active list and surrendered 3.82 percent for a close at T$18.90.
Screen maker Chunghwa Picture Tube Ltd dropped 3.09 percent to T$9.40 after declining to confirm or deny weekend news reports that it was considering a merger with Quanta Display Inc.
Quanta Display added 1.36 percent at T$11.15, however. Acer Inc ended up 0.49 percent after chairman J.T. Wang forecast annual sales growth at 40-50 percent in the next three years, which he said would help the Taiwan firm become the world's number three personal computer vendor.
The over-the-counter market's TAISDAQ index slipped 0.49 percent to 115.62, while September TAIEX index futures fell 15 points, or 0.25 percent, to 6,030. (US$1 = T$33.1).