Taiwan’s TAIEX fell 12.2% in a week; Korea halted KOSPI trading

01How far Taiwan fell, and what moved it

The index opened at 38,915.76 and touched 37,837.05, 3,737.67 points below Thursday’s close, before recovering.⁴ CNA called that the largest intraday point decline in the market’s history; on the close it was the fourth-largest single-day point loss.⁷⁸ Nikkei Asia’s headline called it the steepest fall ever.¹⁴ In percent it was not: on 17 July the index closed 6.47% lower.³

TSMC, more than 40% of the market’s value, opened at NT$2,020, 9.8% down and at its daily limit, and closed 4.69% lower at NT$2,135, 9.9% below its 30 October close.⁵⁸ Foreign investors sold a net NT$91.19bn of shares on Friday and NT$524.38bn over the week; domestic investment trusts bought a net NT$128.82bn.⁶ Dealers attributed the sell-off to losses on Wall Street and concern over possible restrictions on AI data-centre building after Democrats won both chambers of Congress and governorships including Texas.⁸ That evening the committee of the NT$500bn National Financial Stabilization Fund authorised its tenth market intervention since 2000, and the Financial Supervisory Commission encouraged listed companies to buy back shares and tightened stock borrowing for short selling.⁹

02How Korea's circuit breaker works

The Korea Exchange’s rule has three stages. When the KOSPI stays more than 8% below the previous close for one minute, all trading in the KOSPI market and the futures and options linked to it stops for 20 minutes; orders can be cancelled but not placed. A second 20-minute halt follows at 15% if the index is also 1% below where the first began; at 20%, with the same extra 1%, trading ends for the day. Each stage can run once a day, and the first two not in the last 40 minutes of the session.¹³ Friday’s was the tenth activation this year, Yonhap reported.¹⁰ In Taipei, what stopped TSMC’s fall at the open was a limit on the single stock: 10%, the most a share may drop in a day.⁸

Foreign investors sold a net ₩2.8 trillion of KOSPI shares, Yonhap reported. Lee Kyoung-min of Daishin Securities attributed the fall to concern that Congress could tighten rules on AI data centres, called the reaction “excessive” and said a complete halt to data-centre construction was unlikely.¹¹ The finance minister, Lee Hyoung-il, said the government was ready to act against swings unrelated to fundamentals.¹²

03What to watch

US markets reopen on Friday morning New York time, after the close in Taipei and Seoul. The stabilisation fund has authority to buy, but has not said how much or when.⁹ The fears behind both falls are about how much the largest companies will keep spending on data centres; that spending is tracked quarter by quarter in our Big Tech capex Trend.