South Korea's KOSPI plunged more than 3 percent and Japan's Nikkei slipped on Thursday, with the Asian stock markets seeing sharp divergence following the US Midterm Elections, which saw Democrats seize control of both chambers of Congress. Concerns over tighter regulation of artificial intelligence companies triggered selling in semiconductor stocks. Automakers and consumer-related shares rallied on expectations of lower tariffs and easing crude oil prices.
South Korea's KOSPI fell 184 points, or 3.25 percent, to 5,500, dragged down by heavy selling in chipmaking giants Samsung Electronics and SK Hynix. Japan's Nikkei 225 declined 275 points, or 0.44 percent, to 61,913.5, reversing earlier gains.
However, Hong Kong's Hang Seng surged 751.6 points, or 3.1 percent, to 24,671, highlighting the rotation away from technology hardware towards consumer-oriented businesses.
Why are KOSPI and Nikkei falling after the US elections?
The Democrats' sweeping victory in the US midterm elections has raised concerns that increased regulatory scrutiny could slow artificial intelligence investments and delay data centre construction. According to Bloomberg, worries are mounting over potential delays in data centre projects after Democrats capitalised on voter concerns surrounding artificial intelligence during the election campaign.