Tokyo:Asian stock markets experienced mixed outcomes on Thursday as significant losses in artificial intelligence-related shares affected Japan and South Korea, countering gains in other markets after the US midterm elections.
According to United News of Bangladesh, South Korea's Kospi index dropped over 5%, and Japan's Nikkei 225 fell nearly 2%. This decline in AI stocks was accompanied by a decrease in oil prices and mixed movements in US stock futures, following a rally on Wall Street after the Republican Party lost control of Congress.
South Korea's Kospi, which has seen substantial volatility due to AI-driven trading, fell by 5.3% to 5,383.80. Major companies like Samsung Electronics and SK Hynix saw their shares drop by 7.6% and 9.4%, respectively. In Tokyo, the Nikkei 225 decreased by 1.8% to 61,077.90, with SoftBank Group, Tokyo Electron, and Advantest witnessing significant declines.
Conversely, Hong Kong's Hang Seng Index rose by 3.2%, while Shanghai's Composite Index slightly decreased by 0.1%. In other parts of the region, Australia's S&P/ASX 200 increased by 2.6%, and India's Sensex rose by 2%.
Swissquote analyst Ipek Ozkardeskaya noted that global markets generally welcomed the Democrats' victory, anticipating potential easing of tariffs and improved US trade relations. However, she cautioned that the political shift may pose challenges for the AI industry, which is already under scrutiny for its substantial investments and uncertain returns.
On Wall Street, the S&P 500 rose by 1.6% on Wednesday, with the Dow Jones Industrial Average and Nasdaq Composite also making gains. The rally was bolstered by hospital operators and companies serving lower-income consumers. Investors typically prefer divided political control in Washington, as it reduces the likelihood of major economic policy changes, though company earnings and interest rate trends remain crucial factors for the stock market.