Asian stocks opened higher on Monday, supported by gains in U.S. equities and a rebound in Taiwan's market. The MSCI Asia Pacific Index rose 0.7%. Japan's Nikkei 225 increased by 1.9%. This comes after a 4.2% jump in U.S. semiconductor shares on Friday, despite ongoing concerns about an investigation into Nvidia's CEO Jensen Huang.
Taiwan's Market Measures
Taiwan's benchmark Taiex Index surged as much as 5%. This marked its largest gain since July 31. The rally ended a seven-session decline that had pushed the technology-heavy market into bear territory. Key contributors to the rise included Taiwan Semiconductor Manufacturing Co. and MediaTek Inc., both gaining at least 5%. The rebound followed announcements from Taiwan's market regulator and finance ministry. They pledged to take steps to restore investor confidence. These steps include capping the volume of intraday short-sale orders and raising the minimum margin requirement for short-selling activities.
Regulatory Actions
The Financial Supervisory Commission stated it would limit intraday short-sale orders to 3% of a stock's average daily trading volume, down from 30%. The minimum margin requirement for short-selling will also rise to 130% from 90%. Analysts from Goldman Sachs noted that while the National Stabilization Fund has NT$500 billion available for market intervention, the actual capital used in past instances has been much lower. Past interventions have led to an average market rally of 6% in the following week.
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The measures taken by Taiwanese authorities are expected to stabilize the local stock market. This is likely to benefit technology stocks. This development could influence investor sentiment across the broader Asian market as concerns over Nvidia's investigation continue.
Watch for further updates on the effectiveness of Taiwan's market measures and any developments regarding Nvidia's investigation, which may impact tech stocks globally.
Based on reporting by: businesstimes.com.sg, livemint.com