Taiex Rebounds 6.1% After Taiwan Activates Stabilization Fund

Taiwan Semiconductor Manufacturing Co. rose 6.6%, Foxconn Technology gained 8.5% and MediaTek advanced 9.9%. The rebound followed a loss of more than 12% for the Taiex last week, its steepest weekly decline since the week of 9/11 in 2001. The selloff came after Democrats’ sweeping win in the U.S. midterm elections fueled concerns about a slowdown in data-center construction.

At an emergency meeting Friday afternoon, Taiwan’s National Financial Stabilization Fund authorized its executive secretary to deploy funds as needed to support the market. Foreign institutional investors sold a net 524.4 billion New Taiwan dollars, or US$16.0 billion, in equities last week, after selling a record US$30.33 billion in October, according to the fund.

Goldman Sachs analysts said the announcement could lift sentiment and investor confidence, but actual purchases may be more limited. They expect high-quality, inexpensive index heavyweights to be the fund’s main targets.

Capital Economics analysts said it is too early to determine whether global market turbulence signals the start of an AI investment slowdown. If it does, they said, exports from technology-heavy economies such as Taiwan could decelerate, while chipmakers may scale back their own investment plans.