Stocks snapped a three-session winning streak and ended lower Wednesday as political concerns and overnight losses in US stocks prompted investors to take profits.
The TAIEX closed down 26.48 points, or 0.5 percent, at 5,884.97. The Taiwan Futures Index shed 0.4 percent to 5905. Decliners outnumbered gainers 456 to 270 with 197 shares unchanged in trading valued at NT$68.74 billion (US$2.01 billion).
Analysts said investors were unsure which direction the market would take in the near future.
"Investors think there are unlikely to be any further big gains in stocks, so they'd rather exit and wait and see," said Richard Ho, assistant manager at Shinkong Securities Co (新光證券).
Investors were also cautious because of continuing debate over whether Taiwan should hold a referendum on its sovereignty, a move likely to annoy China.
The financial subindex led the losses, moving down 1.4 percent.
Cathay Financial Holding Co (國泰金控), Taiwan's largest financial services company, fell about 1 percent to NT$51.00 on suspected selling by the government, Ho said. The government may have sold the stock to free up funds it might need to support the market ahead of the presidential election.
Chinatrust Financial Holding Co (中信金控), Taiwan's fourth-biggest financial services company by market value, fell 1.8 percent to NT$33.00, after cutting its 2003 pretax profit forecast earlier this week.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) gained after Morgan Stanley raised the stock to "overweight" from "equal-weight," citing better demand for the company's products.
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