The weighted index rose 4.18 points or 0.05 percent to 7,687.15 on turnover of NT$99.69 billion (US$3.09 billion).

Losers led gainers by 1,675 to 853 with 231 stocks unchanged.

The market opened 0.16 percent higher on a mild technical rebound but pressure followed to erode earlier gains with the index drifting without direction until the end of session, dealers said.

Thanksgiving takes place on Thursday and Wall Street will be closed until yesterday.

Huang said while investors remained upbeat about the market outlook, "the current valuations are mostly high. Cautious sentiment dominated the trade."

The optical electronic sector benefitted from rotational buying, dealers said.

Everspring rose 2.91 percent to NT$95.50 and Tyntek Tech added 4.69 percent to NT$31.25.

The food sector also outperformed the broader market with Wei-Chuan Foods up 1.24 percent at NT$44.80 and rival Uni-President Enterprises up 0.39 percent at NT$39.00.

Huang said without a visible presence of foreign investors, the market is expected to keep moving in a narrow range in the near future.

Among large high-tech stocks, Taiwan Semiconductor Manufacturing Co closed up 0.49 percent at NT$62.00, while United Microelectronics Corp fell 1.57 percent to NT$15.70.

In the financial sector, Cathay Financial rose 0.35 percent to NT$57.70 but Fubon Financial fell 0.54 percent to NT$37.15.

Taiwan's Taiex index rose 4.18, or 0.1 percent, to 7,687.15 at the close of Taipei trading.

Giga Solution Tech Co. (3559), an integrated circuit testing company, surged by its 6.9 percent daily limit to NT$18.60, the most since Sept. 25, after its client MediaTek Inc. and Qualcomm Inc. agreed to share patents related to mobile- phone technologies.

Quanta Storage Inc. (6188) slid 7 percent to NT$57.20, the most since July 27, after saying it lost two patent lawsuits to Japan's Ricoh Co. and was ordered to pay US$14.5 million as damages.