Taipei:The management committee of Taiwan's National Financial Stabilization Fund has authorized a market intervention to address volatility and boost investor confidence after the Taiex experienced a significant drop. Earlier in the day, the Taiex, Taiwan Stock Exchange's benchmark index, fell 1,873.08 points, closing at 39,701.64, marking the fourth-steepest single-session point decline.
According to Focus Taiwan, the intervention represents the 10th of its kind since the NT$500 billion stabilization fund was established in 2000. The fund was created to protect the local stock market from unexpected external events. The committee met to discuss the intervention after the Taiex's sharp decline, which occurred amid concerns over potential restrictions on AI data center development following the U.S. midterm elections.
The Taiex has lost approximately 20.55 percent from an intraday high recorded on October 6. Analysts attribute the decline to foreign institutional investors' continued net sales, reflecting unstable market confidence. The committee's statement emphasized the necessity of intervention due to persistent global political and economic uncertainty.
In the wake of the U.S. midterm elections, both U.S. and Asian equity markets faced significant pressure. The Taiex's recent 12.19 percent drop was noted, alongside a record net sale of NT$994.32 billion in October by foreign institutional investors. The committee highlighted Taiwan's robust economic fundamentals and strong technology sector, which are closely linked to the Philadelphia Semiconductor Index.
The stabilization fund's last intervention occurred from April 2025 to January 2026, following tariff announcements by the Trump administration. Previous interventions date back to 2000, with instances in 2004, 2008, 2011, 2015, 2020, and 2022.
Additionally, the Financial Supervisory Commission has encouraged listed companies to repurchase shares and adjusted regulations on stock borrowing to foster market stability.
