Taiwan stocks closed 0.23 percent lower on Wednesday, hurt by transport shares amid news that an upcoming key economic development meeting will not include a much-anticipated agenda on full transportation links with China.
Limiting the loss, tech heavyweight AU Optronics Corp jumped 1.46 percent as optimistic investors bet that the company's business will recover slowly in the second half from a dismal first half.
The main TAIEX traded in a tight range throughout the session, closing at 6,376.39 points. Among the most active sectors, the electronics sub-index rose 0.09 percent, while the transportation sub-index fell 0.46 percent.
"Some investors bet Q4 would be a much better time for AU," said Mike Hsiao, head of equities at Invesco Taiwan Ltd, which manages T$31 billion (US $945 million) for clients.
"For the broad market, two issues will continue to depress the market for a while: there will not be a breakthrough in Taiwan's relations with China, and the US Fed could raise interest rates again in August to keep inflation in check."
Academics, businessmen and officials will gather at the Economic Development Forum on Thursday and Friday to discuss medium and long-term goals for Taiwan's economy.
AU ended 1.46 percent higher at T$48.50. The world's number-three flat panel maker, posted its lowest profit in five quarters on Tuesday. While an imminent strong recovery is unlikely, AU said prices of TV panels would rise from September. The company's American Depository Receipts (ADRs) rose 0.33 percent in US trading overnight to US $15.22. That translated into T$49.90 per common share, or a 2.9 percent upside from Taipei's closing price.
In the transportation sector, China Airlines, Taiwan's top airline carrier, fell 0.7 percent. Smaller rival EVA Airways dipped 1.56 percent. Smartphone maker High Tech Computer Corp, whose clients include NTT DoCoMo, rose 3.31 percent after going ex-dividend on Wednesday. It was the most actively traded issue by turnover.