Markets reacted swiftly after the tech-heavy US Nasdaq plunged 5.5 per cent, its steepest percentage drop since April 2025. Following the Democratic Party's midterm victory over President Donald Trump's Republican Party, concerns grew that stricter federal rules could halt data centre construction. The resulting sell-off triggered an automatic 20-minute trading halt on the Kospi after the index plunged 8.5 per cent to 4,923.
Key points
Midterm election outcomes sparked widespread market anxiety over potential regulatory cur…: Midterm election outcomes sparked widespread market anxiety over potential regulatory curbs on artificial intelligence infrastructure.
Concerns regarding the delay of expensive data centre building projects drove severe loss…: Concerns regarding the delay of expensive data centre building projects drove severe losses across the global semiconductor sector.
Extreme equity declines in South Korea forced market operators to briefly trigger circuit…: Extreme equity declines in South Korea forced market operators to briefly trigger circuit breakers to halt trading.
Sources checked by our analysis pipeline: 1
TOKYO: Japanese and South Korean shares plunged on Friday (Nov 6) after US shares tumbled overnight on worries that midterm election results could slow or derail the artificial intelligence data centre investment boom.
Both Tokyo's benchmark Nikkei 225 index and Seoul's Kospi fell more than 6 per cent.
At one point, the Kospi index dived 8.5 per cent to 4,923 - triggering a circuit breaker which suspended trading for 20 minutes.
Investors had initially cheered Tuesday's Democratic drubbing of US President Donald Trump's Republican Party.
But they have since taken a more anxious stance, centred on worries that the electoral shakeup will hit key AI investments seen as important to economic growth.
Of the major US indices, the most impacted was the tech-focused Nasdaq, which finished down 5.5 per cent in a sell-off that battered Nvidia and other semiconductor stocks.
It was the Nasdaq's worst session in terms of percentage loss since April 2025.
In South Korea on Friday, memory chip makers - whose advanced chips are used alongside other data-crunching semiconductors to power AI tools - also suffered.
Energy markets tumbled after the Democratic Party seized control of the U.S. Congress, prompting investors to anticipate potential de-escalation in the military campaign against Iran. However, persistent naval hostilities have limited further losses as tanker traffic faces severe disruption in vital shipping corridors. Analysts warn that suppressed transit volumes will keep crude values supported amid ongoing geopolitical tensions.
Domestic equities face immediate downward pressure as steep overnight tech losses on Wall Street trigger a broader rout across Asian exchanges. However, market observers anticipate that the retreat will be tempered by cheaper crude energy costs and insulated local supply chains. Profit-booking is set to take center stage following a multi-day winning streak that lifted benchmark indexes to multi-month highs.
Elevated real yields are dampening retail interest in non-yielding bullion, redirecting capital toward yielding instruments and defensive assets like the Swiss franc and US Treasuries. This macro transition is curbing investment appetites despite lingering geopolitical friction and a softening US dollar. The shift signals a prolonged phase where precious metals may lag behind equities and industrial commodities.