EL7.AI
StocksMedium•9 November 2026•
4 min read

TAIEX Jumps 5.6% in Biggest Daily Gain Since July as Short-Selling Curbs Take Effect

Key Facts

1The TAIEX rose 5.6% on November 9, and TSMC shares gained 5.6%.
2The stabilization fund totals 500 billion Taiwan dollars, and this would be its tenth intervention since its establishment in 2000.
3The TAIEX fell 4.51% on November 6 and closed at 39,701.64 points.
4Authorities lowered the short-selling order limit to 3% of average daily trading volume and raised the minimum margin to 130%.
5Foreign institutional investors’ net sales totaled 994.32 billion Taiwan dollars in October.

Taiwan’s TAIEX rose 5.6% in Monday’s session on November 9, leading regional gains as Taiwan Semiconductor Manufacturing Co. shares climbed by the same amount, according to the Associated Press. The rebound followed a week of sharp pressure on equities, as new short-selling restrictions took effect and the National Financial Stabilization Fund was authorized to use its funds if needed. The index had risen as much as 6.4% during the session, its biggest gain since July 31, according to a Bloomberg report published by Moneycontrol. The gains ended a seven-session losing streak that had pushed the market into bear-market territory. The fund committee said the authorization aims to calm market volatility amid continued uncertainty and weak investment confidence.

Semiconductor shares led part of the advance, with TSMC and MediaTek each rising at least 6% during the session, according to Bloomberg. The Associated Press said TSMC shares gained 5.6%, linking the move to a rebound in the computer-chip maker. Regional technology shares also benefited from gains in U.S. artificial-intelligence stocks on Friday, after those shares partially recovered from losses earlier in the week. A strategist at Lombard Odier said the stabilization measures "overshadow any impact from developments involving Jensen Huang, which many investors may see as a side issue for the semiconductor sector’s long-term trajectory." The report said developments involving Nvidia’s chief executive were among the factors investors were watching, while Taiwan’s rebound came as technology shares improved globally.

The new short-selling restrictions took effect on Monday, with the regulator lowering the daily limit on sell orders for borrowed shares to 3% of a stock’s average daily trading volume over the previous thirty days, from 30%. It also raised the minimum margin required for these transactions to 130% from 90%. The restrictions coincided with the stabilization fund committee authorizing its executive secretary to use funds as needed to carry out the fund’s mandate of supporting market stability. The fund totals 500 billion Taiwan dollars, and this would be its tenth intervention since its establishment in 2000, according to Focus Taiwan, citing the Central News Agency. The authorization does not mean the fund has injected money or bought shares; the decision provides for the use of funds if needed.

The measures reflect the severity of the selloff that preceded Monday’s rebound. On November 6, the TAIEX fell 1,873.08 points, or 4.51%, to close at 39,701.64 points, below the 40,000-point level. Taiwan’s Ministry of Finance said the index fell 5,510 points between November 2 and 6, and opened Friday’s session down nearly 3,800 points before reaching a recent low of 37,837 points. In the trading week ended November 6, the TAIEX lost 12.19%, compared with a 15.7% decline in the Philadelphia Semiconductor Index. The index also fell about 10,267 points, or 20.55%, from its intraday peak of 49,968.92 points recorded on October 6. The Ministry of Finance said Taiwan’s economy has sound fundamentals and a strong technology sector, but the market’s concentration in technology stocks makes its moves closely tied to the U.S. semiconductor index.

Foreign investors recorded a record net outflow during the decline. Foreign institutional investors sold a net 994.32 billion Taiwan dollars’ worth of Taiwanese shares in October, the highest monthly net selling on record. Net selling reached 524.4 billion Taiwan dollars from the start of November through the fund committee’s announcement on November 6. The committee attributed the pressure to global political and economic uncertainty, saying U.S. and Asian stock markets came under severe pressure after the U.S. midterm elections. Analysts said concerns included possible restrictions on the development of artificial-intelligence data centers. The fund’s previous intervention ran from April 9, 2025, to January 12, 2026, after the Trump administration announced reciprocal tariffs, before the committee decided to end it and return to normal trading mechanisms in January.

The fund’s precedents offer a mixed picture of market performance after its interventions, according to a trading and sales desk note from Goldman Sachs cited by Bloomberg. The market’s average gains were 6% in the week after the nine previous interventions and 22% over a year. But six of those interventions were followed by further declines of between 5% and 28% over six months. The note said these figures relate to past interventions and do not determine the market’s path after the current authorization. Meanwhile, Taiwanese equities’ link to the global technology sector remains a prominent focus, given the index’s concentration in semiconductor companies. The authorization did not specify when the funds would be used, tying their use to an assessment of whether market volatility needs to be calmed.