[TAIPEI] Taiwan stocks fell on Wednesday after a survey showed factory activity in China - one of the island's biggest trading partners - contracted for the seventh straight month.
But traders were cautious ahead of a central bank meeting on Thursday, where a slight majority of economists polled by Reuters expect a rate cut.
Taiwan's central bank governor told parliament earlier in the day that monetary policy is "very loose" and indicated deflation was not a threat for the island.
As of 0210 GMT, the main TAIEX index was down 1.7 per cent at to 8,225.55 points, after closing up 0.7 per cent in the previous session.
The electronics subindex sank 1.8 per cent, while the financials subindex lost 1.6 per cent.
The Taiwan dollar firmed T$0.203 to T$32.768 per US dollar.