Taiwan stocks ended a touch lower on Tuesday, with losses in big tech shares like United Microelectronics Corp (UMC) as investors worried year-end demand may be weaker than expected.
The TAIEX share index ended with a loss of 10.76 points, or 0.18 percent, at 5,849.63, extending Monday's pullback from last week's nearly 5 percent rise.
Analysts said many domestic investors were concerned about political deadlock ahead of December 3 mayoral and county elections, as well as the threat of a bird flu outbreak.
"People are unwilling to chase last week's rally because all the uncertainties that existed before the rise are still there," said Daniel Tseng, manager at Fubon Securities Investment Advisory.
"It is hard to say how the elections will develop. On the fundamental side, electronics share prices have already reflected all the positive news about fourth quarter, but first quarter is still very unclear," he said.
UMC gave up early gains and lost T$0.15, or 0.87 percent, to close at T$17.10 and was the day's most actively traded issue. The company announced after the close of trade that October sales had been off 10.2 percent from a year earlier.
Taiwan Co-operative Bank rose 1.03 percent and Farmers Bank of China jumped 4.67 percent on hopes the two firms would seal a long-expected merger by deciding on a share swap ratio at board meetings later on Tuesday.
The rise in smaller state-controlled banks also led big-capitalisation financial holding companies higher, with Taishin Financial Holding Co adding 0.6 percent.
China Steel Corp, Taiwan's largest steelmaker, tumbled 2.79 percent after Taiwan's government appointed China Airlines Chairman Chiang Yao-chung to take over as chairman of the steel firm. China Airlines edged down 0.34 percent to T$14.45.
Quanta Computer Inc, the world's largest contract manufacturer of laptop computers, added 1.45 percent to T$48.90 after announcing October sales grew 8.28 percent from a year earlier.