Taipei, Aug. 1 (CNA) Shares in Taiwan closed slightly lower Monday after recouping most of their earlier losses as bargain hunters turned active, in particular in the late trading session, dealers said.

Despite recovering from an earlier downturn, the bellwether electronics sector remained weak throughout the session amid concerns over weakening global demand for consumer electronic gadgets, while buying rotated to old economy stocks, providing support to the broader market, they said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended down 18.38 points, or 0.12 percent, at 14,981.69, after moving between 14,886.81 and 14,994.36. Turnover totaled NT$178.85 billion (US$5.95 billion).

The market opened down 17.80 points as investors shrugged off a rally on U.S. markets July 29, when the Dow Jones Industrial Average rose 0.97 percent. Selling continued on the local main board with the electronics sector in focus, dealers said.

With the Taiex dipping below 14,900 points at one point, some investors shifted to the buy side, picking up bargains, especially in the old economy and financial sectors, and bargain hunting became even more apparent in the late trading session with select semiconductor stocks bouncing back, dealers added.

"Before today's fall, the Taiex had significantly rebounded since the main board started its technical recovery from an intraday low on July 12," MasterLink Securities analyst Tom Tang said. Since the intraday low of 13,928 points on July 12, the Taiex had risen about 1,000 points as of July 29.

"Many investors were cautious about a possible major technical pullback. Such weak sentiment has been amplified by fears over weakening global demand for consumer electronic products and that took a toll on the electronics sector today," Tang said.

The electronics sector lost 0.48 percent to close at 695.09, while coming off a low of 691.40, with the semiconductor sub-index falling 0.69 percent, after contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the local market, dropped 0.98 percent to close at NT$504.00 after hitting a low of NT$500.00.

"Although TSMC has been resilient to weakening demand for consumer electronic gadgets due to its strength in high-end process development, the stock still faced selling amid worries over rising inventories in the semiconductor industry as a whole," Tang said. "However, TSMC shares could see strong technical support at around the 20-day moving average of NT$480.00."

On the other hand, United Microelectronics Corp., a smaller contract chipmaker, returned to positive territory, rising 0.37 percent to end at NT$40.30 as bargain hunters rushed to buy into the stock after watching the share price dip to the day's low of NT$39.55.

Also bucking the downturn, smartphone IC designer MediaTek Inc. rose 1.61 percent to close at NT$694.00 after hitting a low of NT$674.00, and application-specific IC (ASIC) designer Global Unichip Corp. gained 5.15 percent to end at NT$531.00.

Also in the electronics sector, Largan Precision Industry Co., a supplier of smartphone camera lenses to Apple Inc., dropped 0.72 percent to end at NT$2,075.00, while iPhone assembler Hon Hai Precision Industry Co. ended unchanged at NT$109.00, with the stock's resilience reflecting optimism over its efforts in electric vehicle development.

In addition, shares in power management solution provider Delta Electronics Inc. rose 0.19 percent to close at NT$258.50, and Internet network device supplier Accton Technology Corp. rose 2.02 percent to end at NT$253.00.

"The local market remained dictated by rotational buying. Today, buying rotated to old economy stocks such as the cement and steel sectors," Tang said.

The cement sector rose 1.03 percent with Taiwan Cement Corp. rising 1.94 percent to close at NT$39.50, and Universal Cement Corp. gaining 0.91 percent to end at NT$22.10. However, Asia Cement Corp. lost 0.24 percent to close at NT$41.35.

In the steel sector, which rose 3.60 percent, China Steel Corp., the largest steel maker in Taiwan, grew 3.25 percent to end at NT$28.60, Chung Hung Steel Corp. gained 7.75 percent to close at NT$27.10, and China Steel Structure Corp. soared 10 percent, the maximum daily increase, to end at NT$57.60.

The financial sector also outperformed the broader market, rising 0.34 percent with Fubon Financial Holding Co. up 0.89 percent to close at NT$56.60, and Yuanta Financial Holding Co. up 1.50 percent to end at NT$20.30.

"As many foreign institutional investors have moved their funds out of Taiwan due to the on-going rate cycle by the U.S. Federal Reserve (Fed), turnover on the main board has remained low," Tang said. "It will not be easy for the Taiex to climb from the current consolidation mode anytime soon."

According to the TWSE, foreign institutional investors sold a net NT$7.11 billion worth of shares on the main board Monday.