Taiwan stocks extended losses from the last session's 2004 closing low in trade on Tuesday, as heavy foreign selling pressure on tech shares outweighed bargain-hunting in banking and industrial stocks.
The TAIEX share index was down 2.04 percent at 5706.05 after 90 minutes of trade, seeking a bottom as external worries combined with domestic political uncertainties from a presidential election recount for the moment.
Microchip and display panel makers, formerly foreign investor favourites, suffered sharp losses in active trade after overseas asset managers dumped a hefty T$10.8 billion in local stocks on Monday, and the NASDAQ gave up 1.14 percent.
AU Optronics, the world's third largest screen maker, was down 4.62 percent at T$62.00 after its US-traded shares fell 6.99 percent overnight.
"Right now we have external worries from falling foreign markets, and internal concerns from the presidential election recount," said Daniel Tseng, manager of Futon Securities' sales to institutional investors.
"It's very hard to say where downside support might be when we don't know when foreign investors will stop selling, and we don't know when the next wave of margin calls will hit retail investors," he said.
The market tumbled 3.56 percent on Monday as foreign investors pulled capital out of Asian markets amid worries over a US interest rate hike, while domestic players fretted over political uncertainties as a presidential election recount began.
Incumbent Chen Shui-bian defeated opposition leader Lien Chan by a margin of just 0.2 percent on March 20, but Lien says a record 330,000 invalid ballots more than triple that of the previous presidential poll raised suspicions of vote-rigging.