Taiwanese Shares Rally After Government Curbs Short Selling
Taiwanese stocks rose nearly 6% on Monday as the government implemented short-selling restrictions and authorized a NT$500 billion stabilization fund to end a bear market.
The Taiwan Weighted Index rose 5.8% to 42,022.14 on Monday, ending a seven-session decline that had pushed the technology-heavy market into bear-market territory. The rally followed aggressive interventions by the Financial Supervisory Commission and the Ministry of Finance of Taiwan to halt a global rout in AI stocks.
To restore investor confidence, the Financial Supervisory Commission implemented strict curbs on short selling. The regulator reduced the cap on intraday short-sale orders for borrowed securities from 30% to 3% of a stock's average daily trading volume and raised the minimum margin requirement from 90% to 130%. Additionally, authorities authorized the National Financial Stabilization Fund to deploy its NT$500 billion ($15.2 billion) reserve to reduce volatility.
Major technology firms and Apple suppliers led the gains, with Taiwan Semiconductor Manufacturing Co., MediaTek Inc., Largan, and Foxconn seeing significant increases. While Goldman Sachs noted the stabilization fund provided a sentiment boost, the firm observed that actual capital deployment in previous interventions has historically been limited compared to the fund's total usable capital.
In a separate development, the board of Nvidia is investigating whether CEO Jensen Huang was targeted by a foreign intelligence effort. Huang has acknowledged personal infidelity and pledged to cooperate with the internal inquiry.
