Taiwan shares rally 6% as short-sale curbs and NT$500 bln fund lift sentiment

Taiwan stocks rebounded sharply on Monday, ending a seven-session losing streak that had pushed the technology-heavy market into bear-market territory, as new restrictions on short selling and government support measures helped restore investor confidence.

The Taiwan Weighted Index rose 5.8% to 42,022.14, after advancing as much as 6.4% during the session. The intraday rally was its strongest since July 31.

The rebound followed a sharp reversal in technology shares after the previous week’s rout. Taiwanese and Japanese equities had both entered bear-market territory, while South Korea’s Samsung Electronics and SK Hynix had each lost more than 16%.

Chinese and Indian stocks, meanwhile, attracted renewed interest as investors shifted away from markets with heavier exposure to AI-related shares.

Among the leading Taiwanese gainers, Mirle Auto, Parpro, Flexium and Aurotek each advanced 10%, while VIA Tech rose 9.2%. Losses persisted among several smaller stocks – Vizionfocus fell 10%, Sino Horizon dropped 9.9%, Prime Electronics Satellitics declined 8.8%, Lerain Tech lost 8.8% and ACES fell 7.3%.

Major Apple suppliers also participated in the rebound. Largan gained 9.9%, Taiwan Semiconductor Manufacturing rose 6.1% and Foxconn climbed 4.6%.

The Financial Supervisory Commission introduced new measures effective Monday, cutting the cap on intraday sell orders for borrowed shares to 3% of a stock’s average daily trading volume over the previous 30 trading days, from 30%. It also raised the minimum margin requirement for short selling to 130% from 90%.

Separately, Taiwan’s National Financial Stabilization Fund, which has NT$500 billion ($15.2 billion) available, was authorized on Friday to intervene in the market as needed to reduce volatility. The move marks its 10th intervention since the fund was established in 2000.

Broader Asian market strength also supported sentiment despite a separate Nvidia-related development.

The chipmaker’s board is investigating whether Chief Executive Jensen Huang was targeted by a foreign intelligence effort, following reports about his relationship with a former executive at a company under scrutiny by US authorities. Huang acknowledged being unfaithful to his wife and said he would cooperate with the inquiry.