The results of the mid-term elections held in the United States on November 4 have caused a great upheaval in the Asian stock markets. The majority of the Democratic Party in the US Parliament has created an atmosphere of fear among investors. That had an impact on major Asian markets, where indices from Japan to South Korea slipped badly. Along with technology, semiconductor manufacturing companies have been hit the hardest. However, in contrast to this global decline, the Indian stock market maintained its strong momentum.
Markets from Japan to Korea fared badly
Japan was the biggest hit to the sell-off in Asian markets. The benchmark Nikkei 225 fell about 4.5%, while the Topix index fell 2%. Even South Korea’s Kospi couldn’t hold on to an early lead. It was down about 4% during trading. Taiwan’s stock market fell about 3%, while the MSCI Asia Pacific index also fell 2.3%. In comparison, apart from China’s CSI 300, Hong Kong’s Hang Seng Index showed some weakness.
Indian stock markets are up for the fifth consecutive day
On the one hand, the entire Asian markets were seen turning red, on the other hand, Wednesday was also a profitable day for investors in the Indian stock market. The bullish trend that has been going on for the last four trading sessions continued for the fifth day today. Since the early morning, the BSE Sensex along with the NSE Nifty had openly moved in the green. The Sensex rose 383.55 points (0.50%) to close at 77,301.40. Similarly, the Nifty also closed at 23,960.60 with an increase of 149.75 points (0.63%).
Heavy selling in semiconductor manufacturing companies
Aside from AI, the biggest targets of this decline in Asia were companies related to the chip industry. In Japan, shares of Kioxia Holdings fell more than 11%. Advantest fell about 8%, while Tokyo Electron shares fell about 6%. Shares of South Korean giant Samsung Electronics slipped nearly 2%, while SK Hynix fell more than 3%. Both these companies are an important part of the supply chain of AI infrastructure with memory chips worldwide. The Hang Seng tech index also fell 1% in Hong Kong, where shares of Xiaomi Corp, along with Alibaba Group Holding, fell more than 2%.
Why Are Investors Afraid of a Democrat Majority?
The reason behind all the chaos is that investors feel that the Democratic Party’s majority in both houses of the US Parliament could increase the government’s crackdown on AI companies. Many tech companies’ business in Asia is directly linked to American AI investment. Along with this, there is also a question in the market that whether the billions of dollars invested in AI companies will get the expected profit?
