Taiwan Readies Its Fund as Stocks Lose 12 Percent

TAIPEI, Nov. 6 — Taiwan’sTaiwan’s NT$500 billion (US$15.26 billion) National Financial Stabilization Fund was cleared on Friday to step into the stock market, after the Taiex lost 12.19 percent in a week. It will be the fund’s 10th intervention since the government set it up in 2000, Taiwan’s Central News Agency reported.

The fund’s committee met after Taipei’s market closed and authorized its executive secretary to use the money as needed to smooth volatility in the market, CNA reported.Nine BeforeThe fund last stepped in from April 9, 2025, to Jan. 12, 2026, after the Trump administration announced its reciprocal tariffs. Before that it supported the market twice in 2000, and in 2004, 2008, 2011, 2015, 2020 and 2022, CNA reported. The Financial Supervisory Commission separately encouraged listed companies to buy back shares and announced tighter limits on short-sale orders using borrowed shares and higher margin requirements for short sales, effective Monday, Nov. 9.

The committee pointed to the U.S. midterm elections, after which, it said, stocks in the United States and Asia came under heavy pressure. In those elections Democrats took control of both chambers of Congress, and Texas voters elected Gina Hinojosa, a Democrat, as governor, the Associated Press reported. Analysts said the selling came amid fears of curbs on AI data centers after the Democrats’ wins, including in Texas, a major data center hub, and, before that, worries that the big cloud companies might not earn enough on their AI spending, CNA reported. The steepest fall among the exchange’s major industries was in electronic components, a group CNA describes as closely linked to AI development: 21.60 percent in the week. The Taiex without electronics fell 7.84 percent.

In Taipei, one company carries much of the market. TSMC, the world’s largest contract chipmaker, accounts for more than 40 percent of the market’s value, by CNA’s count, and the committee said Taiwan’s market had been highly correlated with the Philadelphia Semiconductor Index.Against the Chip IndexThe committee set the Taiex’s week beside a 15.7 percent fall in the Philadelphia index. That was the chip index’s fall through Thursday; after rising 4.21 percent on Friday, it ended the week down 12.15 percent.

Foreign institutional investors sold a net NT$994.32 billion of Taiwan shares in October, the most in any month on record, and NT$524.4 billion more so far in November, the committee said. Taiwan’s central bank put foreign institutions’ net capital outflows in October at about US$28 billion. Foreign investors held US$1.743 trillion of Taiwan-listed stocks, bonds and Taiwan dollar deposits at the end of October, 292 percent of Taiwan’s foreign exchange reserves, it said. Were they to trim those holdings by just 1 percent and move the money abroad, it would be “harder than ever for the central bank to maintain the Taiwan dollar’s stability,” Lin Chi-chao, Cathay United Bank’s chief economist, told CNA this week.

In New York on Friday, TSMC’s American depositary receipts rose 6.33 percent, to $375.44, as the Philadelphia index rallied; they still ended the week down 7.56 percent.TSMNYSE388.62▲13.18+3.5%Taiwan Semiconductor · Monday’s session On Saturday morning Taiwan’s whole stock market was worth US$4.36 trillion, seventh in the world and just behind Canada’s, according to MarketCapWatch data reported by CNA. It had recently ranked fourth.

Taipei’s market reopens on Monday, Nov. 9, which is Sunday evening in New York, with the fund free to step in, and TSMC reports its October sales on Tuesday, Nov. 10, at 1:30 p.m. in Taipei (12:30 a.m. Eastern). CNA’s account of the committee’s statement names no sum to be spent.