Taiwan's Stock Market in Turmoil: Government Steps in to Stem the Bleeding

As Global Market Fears Mount, Authorities Act to Stabilize the TAIEX

The Taiwan Stock Exchange (TAIEX) experienced a significant downturn following the Qingming Festival holiday, mirroring the global market jitters sparked by the U.S. tariff war. Opening down sharply, the market saw a precipitous fall of nearly 2100 points, accompanied by a surge in trading volume. Within an hour, trading volume approached NT$100 billion, signaling heightened investor anxiety and rapid selling.

In response to the market's distress, it is understood that the government's stabilization forces entered the market, primarily through large state-owned financial institutions. These institutions, including Mega Financial Holding Co., First Financial Holding Co., and Taiwan Cooperative Financial Holding Co., actively purchased shares in these financial holdings. This intervention helped to prevent these stocks from remaining at their lower limits, drawing significant attention from market participants.

Prior to the market's opening, futures trading was already locked at the lower limit. Taiwan Semiconductor Manufacturing (TSMC), the bellwether stock, also opened with its share price at the lower limit and a large number of sell orders. Over 16,000 orders were locked, unable to be executed. By 10 a.m., the number of locked sell orders surged to over 50,000. This situation likely influenced the government's buying strategy, preventing a robust investment in TSMC. The aforementioned state-owned financial holding companies became the focus of market intervention, while most other financial stocks continued to decline at the lower limit, mirroring the broader market trend.