Taiwan stocks fell 4.8 percent to a near 3-year low on Monday, but the main index trimmed steeper losses suffered in morning trade after Taiwan said it is "aggressively evaluating" the possibility for a large government fund to buy local equities. Vice finance minister Wu Tang-chieh, who is in charge of the National Security Fund, said the government is yet to decide when the fund would step in to support the share market.
"We are aggressively evaluating the possibility to buy shares," the vice minister said, as turmoil gripped global markets amid fears of a deepening economic slowdown in China. "We did not expect local stocks to fall so sharply... Obviously the market today was tracking losses on Wall Street and in China market," said Wu.
The main TAIEX index ended at 7,410.34 points, its lowest close since November 2012. At one point in early trade on Monday, the index plummeted 7 percent, but pulled back slightly after Wu's comments. Banks and techs, the two most heavily-weighted sectors, shed 3 percent or more. Wu's comment came after the Financial Supervisory Commission announced a rule on Sunday to discourage investors from short-selling local stocks. The index has shed about 10 percent in six sessions on the China growth scare.