Heavy Selloff in Taiwan Stocks Triggers Support Mechanism
Taiwan stocks on 11月6日 suffered a historic plunge, posting the fourth-largest single-day point drop on record, with electronics heavyweights weakening across the board. Against this backdrop, the government announced a short-selling curb, and the 5000億元 National Stabilization Fund will enter the market to support stocks on 11月9日 Monday in an attempt to stabilize market confidence. With this intervention coming after a rebound in U.S. stocks, whether Taiwan stocks follow with a rebound on Monday has become the focus of market attention.
U.S. Rebound Has Not Confirmed a Bottoming Signal
U.S. stocks rebounded last Friday, with the Philadelphia Semiconductor Index surging 4.21％ and TSMC ADR jumping 6.33％, providing short-term support for Taiwan stocks. Senior analyst Tsai Ming-han noted the U.S. rebound was mainly a bounce after deep losses, but with the PHLX Semiconductor Index still below its 5-day line, there is no clear bottoming signal yet. On market claims blaming the plunge on the Democrats' sweeping win in the U.S. midterm elections and doubts over AI development, he said high-tech fundamentals have not changed significantly and the current slide is mostly sentiment-driven profit-taking in groups that rallied strongly in the first half. Monday could see a V-shaped rebound, or only a brief one-day celebration before further declines, and he advised investors to proceed tactically.
High Win Rate for Intervention but Varied Time to Bottom
Investor Gu Yu analyzed that the National Stabilization Fund has a past intervention record of 8 wins and 1 loss, a win rate of 88.88％, but that was ground out with Daliang ammunition and time, while retail investors often perish in the interim pullbacks, margin calls and psychological collapse. Of the past 9 announcements of fund entry, the broader market bottomed within 3 days 4 times and within one week 1 time, but 4 times it took more than a month, with subsequent pullbacks mostly within 10％, though in extreme cases exceeding 20％. He cautioned that fund entry does not mean an immediate bottom, and anyone seeking to chase a rebound on Monday must first map out their tolerance and psychological expectations for extreme scenarios before positioning.
Scholar Warns of Foreign-Investor Cash-Out Risk
The simultaneous short-selling curb and National Stabilization Fund intervention has raised questions that it could become cover for foreign investors to cash out. National Chengchi University finance professor Yin Nai-ping slammed foreign investors for net selling of more than 9000多億元 in October, treating Taiwan stocks as an ATM in vulture-style operations, while the Financial Supervisory Commission as the regulator stood by indifferently with no defensive action. He warned that under current conditions, foreign investors may use the support to return briefly for another profit before cashing out and leaving again. He called on the government to set up a command center with strategic thinking across equities, foreign exchange and banking funds, and to draw up longer-term, more refined tactics rather than blindly trading against foreign investors. Gu Yu argued that rather than debating whether entry is right or wrong, studying how to profit alongside it matters more.