TAIPEI (Taiwan News) — Taiwan's stock market rallied on Friday (Sept. 20), driven by gains in the US, but the construction sector faced a setback due to new government regulations aimed at curbing property speculation.

The Taiwan Stock Exchange Capitalization Weighted Stock Index (TAIEX) rose 116.73 points, closing at 22,159.42. This represented a 0.53% increase, with turnover reaching NT$461 billion (US$14.4 billion), per CNA.

However, 21 listed construction stocks hit the daily limit down. The decline was triggered by the central bank's seventh round of selective credit controls, which took effect Friday.

Among the large-cap stocks, Taiwan Semiconductor Manufacturing Company (TSMC) gained NT$13 to close at NT$973. Foxconn rose NT$0.5 to NT$177, while MediaTek closed up NT$5 at NT$1125.

The central bank held a monetary policy meeting on Thursday (Sept. 19) and left interest rates unchanged. However, it tightened lending rules for second-home purchases, according to Housefeel.

The new rules lower the maximum loan-to-value ratio for second-home purchases from 60% to 50%. The measure applies nationwide.

The central bank uses selective credit controls to manage the flow and volume of funds. It involves limiting certain activities for financial institutions.

Bank flexibility in offering mortgage loans is reduced when stricter conditions are imposed. Policies include limiting loan-to-value ratios, requiring stricter qualifications, and shortening loan terms.