TAIPEI (Taiwan News) — The Taiwan Stock Exchange plunged 2,065 points, a 9.7% drop on Monday, the largest decline in history, with investors reacting to US President Trump’s proposed 32% tariffs on Taiwan.
During the trading session, 1,702 listed companies dropped by the daily limit, surpassing the 2008 financial crisis spurred by US subprime mortgages. The stock index dropped 10% in just ten minutes on Monday, with many shares quickly dropping to their daily limit with no subsequent trading, per UDN.
This led the daily trading volume to shrink to NT$166 billion (US$4.46 billion), the lowest in two years.
The TWSE has fallen from an all-time high of 24,416 points in mid-July to Monday's 19,232 points, a 21% drop. The decline meets the definition of a bear market.
Taiwan’s Over-the-Counter market also plummeted by 23 points, a 9.6% drop, setting a record for the biggest single decline in history. TSMC shares dropped by the daily limit, down NT$94 to close at NT$848.
The decline came after the stock exchange was closed from Thursday to Sunday due to the Tomb Sweeping holiday, as investors had a chance to calculate the impact of Trump’s 32% retaliatory tariff on Taiwan. Higher tariffs are expected to impact the earnings of many Taiwanese companies.
The Ministry of Finance said the National Stabilization Fund held a meeting to discuss how and when to intervene, potentially deploying a NT$500 billion fund to temper the market sell-off.
After assessing market conditions, NSF said short-term market fluctuations are inevitable, but it expected the stock market to eventually return to fundamentals. It called on investors to rationally evaluate market information and be prudent regarding recent volatility, per UDN.
The NSF said it will monitor domestic and international stock market conditions and does not rule out convening interim meetings and implementing response measures to maintain investor confidence and stabilize the domestic capital market.
Should the NSF enter the market, it would be the third time Deputy Minister of Finance Juan Ching-ha (阮清華) will have deployed the fund. Market analysts believe intervention is unlikely as the stock exchange was near its highest historical level before Trump’s tariff war, making support more difficult. The NSF is expected to be more cautious with its timing and actions.
President Lai Ching-te (賴清德) also helped to calm markets with an eight-minute video and press release saying Taiwan would not retaliate with tariffs, though there has been no response from the US.
Lai said that Taiwan will increase imports from the US and take other measures to ensure the competitiveness of Taiwanese firms to ensure that both Taiwan and the US can welcome a golden age of shared prosperity.
