Taiwan Stocks Plunge in Single Week, Falling Below 40,000 Points
Taiwan stocks faced heavy selling pressure for consecutive days, with the weighted index falling 5,510 points from November 2 to 6, a single-week drop of 12.19%. After the open today (6th), losses intensified, with the intraday low touching 37,837 points, a recent low, and although losses later narrowed, the market still closed at 39,701 points. Compared with this year's high of 49,968 points, Taiwan stocks have fallen 10,267 points, down 20.55%, showing very sharp recent volatility, with selling pressure continuing to build.
U.S. Stocks Plunge and Heavy Foreign Net Selling Undermine Confidence
The National Stabilization Fund noted that after the U.S. midterm elections, U.S. stocks and major Asian股市 fell in tandem, with Taiwan stocks falling 12.19% this week, second only to the Philadelphia Semiconductor Index's 15.7%. As Taiwan's stock market is dominated by high-tech stocks, which are highly correlated with the U.S. Philadelphia Semiconductor Index, the domestic market was notably impacted. In addition to weak international markets, foreign investors continued to withdraw from Taiwan stocks, further deepening downward pressure, with short-term investor confidence clearly insufficient.
According to National Stabilization Fund statistics, foreign investors' net selling of Taiwan stocks in October totaled NT$9,943.16億元, a record single-month high. Entering November, foreign selling pressure has not stopped, reaching NT$5,244億元 as of November 6. The National Stabilization Fund said continued heavy net selling by foreign investors has deepened the downtrend in Taiwan stocks, while high uncertainty in the international political and economic situation has hurt investor confidence. However, the country's economic fundamentals remain sound, with the recent decline mainly reflecting international market movements and capital flows.
Conditions Met for Authorized Deployment to Stabilize Market
The National Financial Stabilization Fund convened its 131st extraordinary committee meeting at 2:30 p.m. today (6th) to discuss recent sharp volatility in Taiwan stocks. After discussion, committee members agreed the current situation meets Article 8 of the Regulations for the Establishment and Administration of the National Financial Stabilization Fund, where domestic or foreign major events and large international capital movements have significantly affected public confidence, causing disorder in capital and other financial markets or risking harm to national stability, and formally resolved to authorize the executive secretary to deploy funds as market conditions warrant to carry out the market stabilization mission, in response to recent sharp stock volatility.
Notably, this resolution authorizes the executive secretary to deploy funds depending on market conditions, and does not mean the National Stabilization Fund has actually entered the market to buy stocks; whether and how much will be deployed will still depend on market conditions.