Asian stocks slide on US midterm results: Nikkei drops 3.6%, Kospi 3.2% as AI shares SoftBank and Advantest tumble
Japan's Nikkei fell 3.6% and Korea's Kospi 3.2% on Wednesday as Democrats won Congress, on fears of curbs on AI data centres. US tech futures fell 2%.
At a glance
- Japan's Nikkei 225 fell as much as 3.6% to about 60,835 on Wednesday, its lowest level since early May, after Democrats were projected to win both houses of the US Congress.
- South Korea's Kospi dropped about 3.2% to 5,466.83, with chipmaker SK Hynix down 3.2%.
- AI-linked shares led the fall: Advantest and SoftBank Group each lost more than 8% at one point, and Kioxia also fell sharply.
- US stock futures slipped, with Nasdaq-100 futures down about 2% and S&P 500 futures down about 1%, while the dollar index eased 0.3%.
- Traders are betting a Democratic Congress, and Democratic governors such as Texas's Gina Hinojosa, will slow the build-out of AI data centres.
Japan's Nikkei 225 fell as much as 3.6% on Wednesday, November 4, to about 60,835 points, its lowest level since early May, as investors sold artificial-intelligence stocks after Democrats were projected to win both the House and the Senate in the US midterm elections. South Korea's Kospi dropped about 3.2% to 5,466.83. The selling followed US stock futures lower, with contracts on the tech-heavy Nasdaq-100 down about 2%.
The reason was specific. Traders fear a Democratic Congress will make it harder and slower to build the huge data centres that power AI, and the companies that sell chips, equipment and money to that boom took the heaviest losses.
The stocks that fell hardest
Tokyo's decline was concentrated in a handful of heavyweights. Chip-testing equipment maker Advantest dropped about 6.4% in early trade and SoftBank Group about 7%; both were down more than 8% at the session's worst. Memory maker Kioxia, already hit on Monday by a weak profit forecast, fell again. The damage was narrower than the headline number suggests: about 130 Nikkei members fell while 95 rose, because a few AI names carry a large weight in the price-weighted index.
In Seoul, SK Hynix, the main supplier of high-bandwidth memory for AI chips, lost 3.2%.
| Market | Move on Wednesday | Level |
|---|---|---|
| Nikkei 225 (Japan) | down 3.1–3.6% | about 60,835 at the low |
| Kospi (South Korea) | down about 3.2% | 5,466.83 |
| Hang Seng (Hong Kong) | roughly flat, swinging between small gains and losses | about 23,500 |
| Nasdaq-100 futures (US) | down about 1.8–2.2% | — |
| S&P 500 futures (US) | down about 0.8–1.3% | — |
| US dollar index | down about 0.3% | 101.39 |
| Brent crude | little changed | about $103–104 a barrel |
Intraday figures; closing levels may differ.
Why traders link Congress to data centres
Several winning Democrats campaigned on the cost of electricity and water used by data centres, which have pushed up power bills in parts of the US. In Texas, the new Democratic governor-elect Gina Hinojosa has promised a moratorium on new data centres, and traders are treating that as a sign of tighter rules elsewhere. A Democratic Congress can also hold hearings on AI companies, block tax breaks and stall spending bills, which adds to uncertainty for firms planning multi-billion-dollar projects.
Shares of US data centre operator CoreWeave fell about 4% in extended trading.
Not everyone sees lasting harm. Trump keeps his veto, and Democrats do not have the two-thirds majorities needed to override it, so sweeping new federal laws on AI are unlikely before the 2028 election. Gridlock over budgets and the debt ceiling is the more immediate risk markets are pricing.
Oil steady as Iran makes new tanker claims
Oil did not add to the pressure. Brent traded around $103–104 a barrel and US crude around $96, well below last week's levels above $110, as talks on reopening the Strait of Hormuz stalled rather than collapsed. Iran's Revolutionary Guards claimed on Wednesday that four tankers were destroyed by naval mines south of the strait and two more ships were seized. The claim has not been independently confirmed, and the US military has said its forces have cleared mines from the main shipping lanes.
What it means for investors in South Asia
India's Sensex and Nifty opened higher, helped by cheaper oil and foreign buying, showing that the sell-off is about AI valuations rather than a broad flight from Asia. For importers in Pakistan and India, a weaker dollar and oil near $103 are a relief compared with the $110-plus prices of late October, which pushed up fuel bills across the region.
Wall Street opens at 7:30pm Pakistan time on Wednesday, when the first full trading session after the election will show whether the futures losses hold. US private payrolls data is due later in the week, followed by the official October jobs report on Friday.
