The government yesterday authorized the activation of its NT$500 billion (US$15.15 billion) National Stabilization Fund (NSF) to prop up the local stock market after two days of sharp falls in reaction to US President Donald Trump’s new import tariffs.
The Ministry of Finance said in a statement after the market close that the steering committee of the fund had been given the go-ahead to intervene in the market to bolster Taiwanese shares in a time of crisis.
The fund has been authorized to use its assets “to carry out market stabilization tasks as appropriate to maintain the stability of Taiwan’s stock trading market,” it said.
Photo: CNA
After falling 9.7 percent on Monday, the TAIEX closed down 772.40 points, or 4.02 percent, at 18,459.95 yesterday, hitting its lowest level in 14 months.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the most heavily weighted stock on the TAIEX, fell 3.77 percent to close at NT$816, and Hon Hai Precision Industry Co (鴻海精密), second to TSMC in terms of market value, fell by the daily maximum for a second day to close at NT$125.
The “international panic atmosphere remains strong,” and foreign investors have continued to sell their holdings since the start of the year, the ministry said.
“This is not conducive to the stability of the Taiwanese shares,” it said.
While the downturn in the TAIEX was capped as some investors appeared willing to buy the dip and turnover on the main board increased to NT$548.951 billion, yesterday’s loss was the eighth-largest daily decline in history, Taiwan Stock Exchange’s data showed.
“Judging from today’s movement, I think some bargain hunters jumped into the trading floor after yesterday’s plunge as the US markets showed signs of stabilizing,” Moore Securities Investment Consulting Co (摩爾投顧) analyst Adam Lin (林漢偉) said.
Lin was referring to the 0.10 percent rebound on after a fall of 5.82 percent on Friday, and a 0.91 percent drop on the Dow Jones Industrial Average, compared with a 5.05 percent plunge a session earlier. That helped major stock markets elsewhere and oil prices recover slightly yesterday after a huge sell-off the previous day.
Tokyo’s stock market closed up more than 6 percent after Japanese Prime Minister Shigeru Ishiba held talks with Trump, while Hong Kong’s stock market closed up by more than 1 percent, having plunged more than 13 percent on Monday, its biggest one-day retreat since 1997.
Trading in Jakarta was briefly suspended after it plunged more than 9 percent in exaggerated moves following a long holiday weekend in Indonesia. At the close, the market fell 7.9 percent to its lowest level since June 2021.
Shanghai advanced 1.6 percent, Sydney and Mumbai added more than 2 percent, while Manila gained 3 percent. Seoul and Wellington also edged up. Europe’s main indices were up by an average of about 1.5 percent approaching the half-way stage.
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