The Democratic sweep of Congress fueled rotation trade in Asia, dragging down shares of chipmakers on concerns over the AI buildout while lifting auto and consumer goods makers.
Heavyweight memory-chip makers Samsung Electronics Co. and SK Hynix Inc. sank more than 5% each Thursday, pulling down South Korea’s benchmark Kospi more than 3%. Meanwhile, automakers including Toyota Motor Corp. and Honda Motor Co. rose around 5% each, helping lift Japan’s Topix to a 1.4% gain. A rally in Chinese internet names — also consumer plays — supported the Hang Seng Tech Index by 5%.
Worries are mounting over potential delays in data center construction after Democrats played to voters’ AI fears in midterm elections. The slump in tech stocks is driving investors into undervalued corners of the market, while automakers are also seen as potential beneficiaries of any pullback in President Donald Trump’s tariffs.
“We’re seeing a clear continuation of the rotation out of chipmakers,” said Tim Waterer, chief market analyst at KCM Trade. “The market is penalizing the parts of the market most exposed to potential regulatory headwinds, namely the semiconductor sector.”
Other chip stocks slumping across the region included Japan’s Advantest Corp. and Taiwan’s MediaTek Inc. Rotation out of these lifted consumer stocks like South Korea’s Hyundai Motor Co. and Australia’s Wesfarmers Ltd., as well as Chinese internet names listed in Hong Kong such as Tencent Holdings Ltd. and Alibaba Group Holding Ltd.