Taipei: Shares in Taiwan saw early gains erode to close slightly higher on Monday, with increased trading volume preceding scheduled index adjustments by MSCI Inc., dealers reported. Profit-taking was notably observed during late trading, especially in Taiwan Semiconductor Manufacturing Co. (TSMC), which faced a reduced weighting by MSCI, although Hon Hai Precision Industry Co. remained robust due to optimism surrounding its AI server advancements.According to Focus Taiwan, the Taiex, Taiwan Stock Exchange's weighted index, concluded with a 44.05-point rise, or 0.19 percent, at a low of 22,948.37, after reaching a high of 23,173.43. The turnover amounted to NT$468.90 billion (US$10.56 billion). The market opened with a 0.40 percent increase, bolstered by a rally in U.S. markets where the Dow Jones Industrial Average hit a record high, and the Nasdaq index also posted gains.As the Taiex surpassed the 23,000 mark, profit-taking emerged, with selling intensifying towards the session's end, reflecting MSCI's index adjustments. "The expanded turnover largely came in the wake of weighting adjustments by MSCI, and TSMC was the focus of selling as the stock suffered the steepest cut in its weighting on the MSCI Taiwan Index," stated Hua Nan Securities analyst Kevin Su. Following the regular index review, TSMC's weighting was reduced by 0.39 percentage points to 52.48 percent.On the main board, TSMC, a key supplier of AI chips to Nvidia, fell 0.96 percent to close at NT$1,030.00, impacting the Taiex's gains by approximately 160 points. Despite this, Su remains optimistic about TSMC's long-term prospects due to AI development. MSCI adjusted Taiwan's weighting in its indexes but maintained its position in the MSCI Emerging Markets Index.TSMC's selling pressure affected other semiconductor stocks, with MediaTek Inc. declining 2.29 percent and ASE Technology Holding Co. falling 0.32 percent. However, United Microelectronics Corp. rose 1.01 percent, indicating interest in AI-related stocks with lower valuations, which helped stabilize the market. Hon Hai, buoyed by expectations of increased AI server shipments, rose 3.69 percent to NT$210.50, while Wistron Corp. and its subsidiary Wiwynn Corp. also saw gains.Investors showed interest in the old economy sector, particularly the construction industry, which rose 2.39 percent. Despite recent falls, Cathay Real Estate Development Co. and Kuoyang Development Co. recorded significant gains. Meanwhile, shipping stocks retreated, with Evergreen Marine Corp. dropping 3.39 percent. In the financial sector, Fubon Financial Holding Co. and Cathay Financial Holding Co. ended higher.Analyst Kevin Su advised investors to monitor the upcoming U.S. Personal Consumption Expenditures (PCE) index and the Federal Reserve's meeting minutes, which could influence policy adjustments. The TWSE reported net buying by foreign institutional investors, amounting to NT$5.22 billion on Monday.