Fund managers had expected a short-term rally after Ma won a second term in a weekend election, but the gains on Monday morning were smaller and briefer than expected. Selling pressure was compounded by an abbreviated trading week, with the market set to close starting on Thursday for the Lunar New Year. "The election factor has already been discounted and the market has gone back to the fundamentals, in which the euro zone debt crisis is the most influential factor," said Beyond Asset Management managing director Michael On. He expected Taiwan shares would continue to ease ahead of the New Year holidays as investors remain cautious, predicting the main share index TAIEX would retreat below 7,000 points in the short term. The TAIEX index tracked losses in other regional bourses. As of 0142 GMT, it had shed 1.03 percent, or 74.25 points, to 7,107.29, after opening up 0.84 percent, weighed down by semiconductor shares that fell 2.65 percent. Developers and car makers, which are expected to benefit from a closer Taiwan-China relationship, were the top gainers, up 2.14 percent and 1.75 percent, respectively. The department stores and tourism sub-indices also gained 0.83 percent and 0.35 percent, respectively. Financial shares, however, turned negative and fell 0.61 percent. Electronics shares also slipped 0.64 percent, with TSMC shedding 2.84 percent ahead of fourth-quarter results on Wednesday.