Taiwan's Taiex jumps 6% after steps to support the stock market

what happened

Taiwanese stocks rose on Monday. According to Dow Jones Newswires, the benchmark Taiex was up about 6.1%, on track for its biggest daily gain since late July. The government tightened short-selling limits and activated the market stabilization fund to halt the sell-off in artificial-intelligence shares. TSMC shares climbed 6.6%, Foxconn Technology gained 8.5% and MediaTek advanced 9.9%.

Last week the Taiex fell more than 12%, its worst weekly loss since the week of September 11, 2001. The drop followed Democrats' sweeping win in the U.S. midterm elections, which raised concerns about slower data-center construction. Foreign institutional investors sold a net 524.4 billion New Taiwan dollars (US$16.0 billion) of equities last week, after dumping US$30.33 billion of stocks in October, a monthly record.

why it matters

Goldman Sachs analysts said actual deployment of the fund may be more limited than the announcement suggests, with purchases likely focused on large, inexpensive index heavyweights. Capital Economics said it is too early to tell whether the turbulence marks the start of an AI investment slowdown; if it does, exports from tech-heavy economies like Taiwan could decelerate.

market impact

Taiwan stocks: support measures and short-selling curbs trigger a rebound in chipmaker shares

• ▲Taiex pressure up — the stabilization fund and short-selling curbs support demand for shares
• ▲TSMC pressure up — chipmaker shares rebound after a sharp sell-off on government measures

instruments