TSMC posts largest loss ever, dragging Taiwan’s main stock benchmark into bear market

Taiwan picked an interesting time for a pair of stock market holidays.

Markets were closed on Thursday and Friday last week for Children’s Day and Tomb-Sweeping Day. When they reopened, the TAIEX entered a bear market in its largest drop on record.

For all the digital ink spilled about market concentration in the US, the main Taiwanese stock index has a 35% weighting toward one company: semiconductor giant TSMC.

While TSMC’s ADRs traded in the US got clobbered at the end of last week, the stock’s home listing played catch-down in a massive way on Monday. Shares fell nearly 10%, their largest loss ever.

The Taiwan Stock Exchange has tightened rules on short selling and exchange Chairman Sherman Lin said it was prepared to stabilize the market in the event of an “irrational decline.” Taiwan’s central bank also briefly intervened in the foreign exchange market on Monday.