Asian markets split after US midterms
Chipmakers sold off in Seoul and Tokyo as Wall Street rallied, while crude oil prices dropped on expectations of reduced conflict.
By Meera Fletcher ·
Asian stock markets moved in opposite directions on Thursday, driven by the immediate fallout from the United States midterm elections. While broad indices climbed, sectors tied closely to artificial intelligence and defense suffered heavy losses. The divergence reflects investor anxiety over who controls Washington and how that shift will affect corporate profits and government spending.
In South Korea, the Kospi index dropped 3.5% by late morning, settling at 5,484.38. The decline was fueled by aggressive selling of semiconductor stocks. Samsung Electronics shares fell 5.7%, and SK Hynix lost 7.4%. Japan’s Nikkei 225 index slipped 0.5% to 61,914.53. SoftBank Group, an investor in OpenAI, shed 5.3%. Equipment makers Tokyo Electron and Advantest declined 7.7% and 9.4%, respectively. Taiwan’s Taiex index lost 1.6%.
Conversely, markets with less exposure to the AI boom posted gains. Hong Kong’s Hang Seng index jumped 2.8% to 24,597.59. The Shanghai Composite rose 0.1%. Australia’s S&P/ASX 200 climbed 1.9% to 9,003.40. These moves followed a strong session on Wall Street on Wednesday, where the S&P 500 rose 1.6% and the Dow Jones Industrial Average surged more than 1,500 points.
The shift in congressional power has specific implications for companies linked to the current administration. Trump Media & Technology Group fell 24.5% on Wednesday, bringing its share price to $4.49. Elon Musk’s Tesla dropped 3.3%, and SpaceX sank 3.8%. Investors view a Democratic-controlled Congress as a potential check on business interests aligned with the president.
Energy prices reacted to the political landscape as well. Brent crude oil plunged 8.7% to $94.62 on Wednesday as traders priced in a possible de-escalation of the war in Iran. By early Thursday, the price hovered near $94, its lowest level in two months. Defense stocks followed the oil price downward. Lockheed Martin dropped 6.9%, Northrop Grumman fell 4.5%, and General Dynamics lost 2.6%.
Renewable energy stocks benefited from the mixed signals. First Solar rose 4.6%, and Enphase Energy gained 3.7%. Currency markets also adjusted, with the U.S. dollar weakening to 157.96 yen from 158.41 yen. The euro strengthened to $1.1256 from $1.1228.
More Business · Business Complaints · Report a business · Got a Story?
