The Greater China stock market is also experiencing a ‘blue wave shock’… Taiwan index fell 4.5% (comprehensive)

(Shanghai = Yonhap News) Correspondent Cha Byeong-seop = With the landslide victory of the U.S. Democratic Party, which has shown a regulatory stance on the artificial intelligence (AI) industry, in the midterm elections and the resulting weakness in the U.S. stock market, stock markets in the Greater China region, including Taiwan, also plummeted on the 6th.

According to Chinese portal sites Groommang and Baidu, Taiwan's Jiquan index, which has a high proportion of technology stocks, closed at 39,701.64, down 1,873.08 (-4.51%) from the previous day, falling below the 40,000 mark.

The Jiquan Index plummeted 3,736.67 (-8.99%) immediately after opening, recording the largest intraday drop in Taiwanese stock market history.

As of the closing price on the 6th of last month, the Jiquan Index rose to 49,822.55 and was looking at the 50,000 level, but it later turned downward and fell 20.3% from the high point of the day, technically entering a bear market.

It has continued its downward trend for the past 7 consecutive trading days, and this week's drop (-12.18%) was the largest since 2001 according to the London Stock Exchange Group (LSEG).

Bloomberg News reported that net selling of Taiwanese stocks by foreigners in the fourth quarter exceeded $45 billion (about 61 trillion won).

The stock price of TSMC, the world's largest foundry (semiconductor consignment production) company and No. 1 in Taiwan's market capitalization, fell to 9.82%, close to the lower limit, shortly after opening, and then narrowed the decline and closed 4.69% lower. TSMC also fell for 7 consecutive trading days.

Taiwan President Lai Ching-de said on this day, "I hope that the people will not fall into panic regarding the changes in the financial market over the past two trading days. The government will closely monitor various changes in the financial market and come up with related policies to promote the rapid recovery and stability of the financial market."

The market is watching the market stabilization policy that Taiwanese authorities will announce.

In the mainland Chinese stock market, the Shanghai Composite Index closed down 1.10%, and the CSI 300 Index, which consists of the top 300 stocks in the Shanghai and Shenzhen Stock Markets by market capitalization, did relatively well, closing down 1.44%.

However, technology stocks were weak, with the Guachangpan 50 index, which consists of 50 representative stocks in Keqiangpan and a market dedicated to science and technology stocks, falling 2.60%, and Changshin Memory (CXMT) stock price fell 4.98%. On the other hand, thanks to the performance announcement effect, the stock price of Huahong Semiconductor, listed in Hong Kong, rose 6.86%.

Hong Kong's Hang Seng Index fell 1.27%.

Amid increasing demand for safe assets, China's 10-year government bond interest rate fell to 1.58% during the day, hitting an all-time low.

As the Democratic Party took control of the Senate and House of Representatives in the recent U.S. midterm elections, concerns about delays in data center construction and slowing memory demand were highlighted, and stock prices of semiconductor-related companies are plummeting in major countries' stock markets.

In China, this week the People's Bank of China introduced capital market stabilization policies, including lowering the interest rate on refinancing (loans made by the central bank to commercial banks) related to companies' share purchases.

Pang Gung-seong, president of the People's Bank of China, said on the 3rd, "We will protect the stability of financial markets such as stocks, bonds, and foreign exchange, and protect the Maginot Line to prevent a systemic financial crisis."