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Core Development: Taiwan Steps In to Calm Investor Nerves After Bruising AI RoutTaiwan stepped in to try to calm investor nerves after a deepening selloff in artificial intelligence shares drove the island’s benchmark to its worst week in a quarter century. In separate announcements after the close of trading Friday, the market regulator said it will impose curbs on short selling from Nov. 9, and the Finance Ministry said it’s prepared to deploy its NT$500 billion ($15 billion) stock stabilization fund in the wake of the slump. The Financial Supervisory Commission said it will cap the volume of intraday short-sale orders for borrowed securities at 3% of a stock’s average daily trading volume over the preceding 30 days. That’s reduced from 30% previously. The financial regulator will also raise the minimum margin requirement for short-selling activities to 130% from 90%. Taiwan’s benchmark Taiex plunged as much as 9% on Friday, and fell into a bear market. While the index pared some losses later in the session, it still posted its biggest weekly loss since 2001. Heavyweight Taiwan Semiconductor Manufacturing Co. led the slump, dropping in tandem with a broader rout in global semiconductor shares. Asian markets have been hammered by the deepening selloff in AI shares after the Democrats’ midterm election win. That result has added a fresh catalyst to the unwinding of the AI trade, which was already under pressure from doubts over whether massive investments in the technology will pay off. As well as the slump in Taiwan, Japan’s Nikkei 225 Stock Average fell into a bear market and South Korea’s Kospi gauge plunged on Friday. “Taiwanese stocks have seen heightened volatility recently amid global political and economic uncertainty,” the FSC said, adding that its contingency measures will seek to maintain order and stability in local equities. The island’s authorities have previously turned to trading curbs during bouts of severe market turmoil, most recently in 2025, when concerns over President Donald Trump’s tariff policies roiled global equities. The Finance Ministry highlighted continued selling by foreign investors as indicating “a significant deterioration in market confidence.” Foreign investors have been steadily cutting their exposure, with net selling of local shares totaling more than $45 billion so far this quarter, according to Bloomberg-compiled data.
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Market & Financial Impact: The market regulator said it will impose curbs on short selling from November 9
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Actionable Insight: 🔴 Bearish Risk: Regulatory scrutiny, profit decline, or sell-off risk may create near-term volatility.
Taiwan stepped in to try to calm investor nerves after a deepening selloff in artificial intelligence shares drove the island’s benchmark to its worst week in a quarter century.
In separate announcements after the close of trading Friday, the market regulator said it will impose curbs on short selling from Nov. 9, and the Finance Ministry said it’s prepared to deploy its NT$500 billion ($15 billion) stock stabilization fund in the wake of the slump.
The Financial Supervisory Commission said it will cap the volume of intraday short-sale orders for borrowed securities at 3% of a stock’s average daily trading volume over the preceding 30 days. That’s reduced from 30% previously.The financial regulator will also raise the minimum margin requirement for short-selling activities to 130% from 90%.
Taiwan’s benchmark Taiex plunged as much as 9% on Friday, and fell into a bear market. While the index pared some losses later in the session, it still posted its biggest weekly loss since 2001. Heavyweight Taiwan Semiconductor Manufacturing Co. led the slump, dropping in tandem with a broader rout in global semiconductor shares.
Asian markets have been hammered by the deepening selloff in AI shares after the Democrats’ midterm election win. That result has added a fresh catalyst to the unwinding of the AI trade, which was already under pressure from doubts over whether massive investments in the technology will pay off. As well as the slump in Taiwan, Japan’s Nikkei 225 Stock Average fell into a bear market and South Korea’s Kospi gauge plunged on Friday.