Taiwan stocks edge higher, but techs weigh

* Taiwan stocks off Thursday's 14-month intraday high

* TSMC, Hon Hai fall after worse-than-expected August sales

* Main index seen trading between 7,200 and 7,500 next week

TAIPEI, Sept 11 - Taiwan stocks edged up 0.12 percent on Thursday, with losses in technology heavyweights such as TSMC after worse-than-expected August sales offsetting gains in financial shares.

As of 0151 GMT, the main TAIEX share index rose 10.15 points to 7,342.23, retreating from a 14-month intraday high in the previous session.

Tech stocks dropped, with Taiwan Semiconductor Manufacturing Co Ltd and electronics giant Hon Hai shedding 1.73 and 2.38 percent, respectively, after both reported a lower-than-expected August sales.

TSMC, the world's top contract chip maker, reported a 7 percent fall in August sales on Thursday, but analysts say the company is on track to reach its third-quarter sales target due to rising technology demand.

"TSMC's August sales did not surprise investors," said Bevan Yeh, a fund manager at Prudential Financial.

"The upside potential for TSMC stocks is limited. It's traded at about 3 times price to book, approaching the 3.5 times peak it has had in recent years."

The technology sector has gained about 8 percent over the past two weeks.

The financial sub-index gained 0.8 percent, with Cathay Financial up 0.8 percent.

"Foreign investors' net purchases yesterday were mostly in financial shares," Yeh said, adding that they were driven by hopes of closer ties with China and as more Chinese bankers expressed interest in setting up representative offices in Taiwan.

Yeh expected the broader market to trend upwards and test 7,500 points next week.

For a table of foreign trading in Taiwan stocks, double-click on