Key insights
- Asian stocks pared early losses as U.S. midterm election results provided more clarity, with Democrats securing control of Congress. While this raised concerns about potential regulatory scrutiny on AI and data centers, some investors viewed the outcome as reducing market uncertainty. Advanced Micro Devices reported strong third-quarter revenue and provided an optimistic forecast, offering some support to the technology sector.
Investing.com-- Asian stocks pared most of their early losses on Wednesday as investors gained clarity on the outcome of U.S. midterm elections, with Democrats securing control of Congress from President Donald Trump’s Republicans.
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South Korea’s KOSPI closed 0.6% higher after falling as much as 4% earlier in the day, with Samsung Electronics (KS:005930) and SK Hynix (KS:000660) reversing most of sharp losses.
Japan’s Nikkei 225 ended 1.4% lower after having dropped nearly 5% earlier, while the broader TOPIX index fell 0.9%.
Technology stocks remained under pressure after recent concerns over elevated valuations, heavy artificial intelligence investment and uncertain returns triggered sharp losses across the sector.
Early election results raised the prospect of political gridlock in Washington.
Democratic victories in several traditionally Republican strongholds, including South Carolina, Texas and Ohio, helped the party secure control of both chambers of Congress, in a significant setback for Trump.
Investors were concerned that the change in congressional control could bring greater regulatory scrutiny of artificial intelligence and restrictions on data centre construction.
The prospect of political gridlock could also complicate negotiations over fiscal policy, government spending and other economic priorities during the remainder of Trump’s term.
However, some investors saw the election outcome as removing a source of uncertainty that had kept markets cautious ahead of the vote.
Investors also weighed strong results from Advanced Micro Devices, which reported third-quarter revenue of $13.38 billion, up 45% from a year earlier, and forecast fourth-quarter revenue of about $17 billion.
Singapore’s Straits Times Index edged 0.2% lower to 5,193.61, down about 10% from September’s all-time high of 5,828.5 points.
If losses hold till market close, Singapore shares would technically enter correction territory on Wednesday, as losses in banking and other heavyweight stocks added to pressure from a broader regional sell-off.
Elsewhere, China’s Shanghai Composite and the blue-chip Shanghai Shenzhen CSI 300 jumped 2% each, while Hong Kong’s Hang Seng rose 1.5%.
Australia’s S&P/ASX 200 fell 0.6%, while India’s Nifty 50 gained 0.1%.
Investors were also monitoring developments in U.S.-Iran peace talks. Tehran and Washington are reportedly reviewing fresh proposals from mediators aimed at resolving their differences and avoiding a return to full-scale war.
Oil prices remained volatile as traders weighed the possibility of easing supply disruptions against the risk of renewed escalation.
In China, the RatingDog services purchasing managers’ index fell to 50.8 in October from 51.6 in September, signalling the slowest expansion in three months.
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