Shares plunge in Tokyo and Seoul after US tech rout - CNA
Investors are centred on worries that the US electoral shakeup will hit key AI investments seen as important to economic growth.
Currency dealers talk in front of an electronic board displaying the exchange rate between the US dollar and South Korean won, the Korea Composite Stock Price Index (KOSPI) and South Korean won and the Korea Securities Dealers Automated Quotations (KOSDAQ) at the dealing room of a bank in Seoul, South Korea on Jun 8, 2026. (Photo: Reuters/Kim Hong-Ji)
SINGAPORE: Asian tech firms suffered a bloodbath on Friday (Nov 6) as investors tracked a collapse on Wall Street fuelled by fears that Democrats will ramp up regulations of the AI industry following their blowout victory in this week's US midterm elections.
Trading boards were a sea of red in early business, with Seoul and Tokyo taking the brunt of the selling as traders fled to the hills amid uncertainty about a sector that had pushed stock markets to record highs just five months ago.
While the historic "blue wave" in Tuesday's vote had been initially welcomed on hopes it could put pressure on President Donald Trump to wind down his war against Iran, fears about the impact on the AI buildout soon came to the fore.
Seoul dived 8.5 per cent at one point, triggering a circuit breaker which suspended trading for 20 minutes, with chip giant SK hynix off 10 per cent while rival Samsung was 8 per cent down. The Kospi more than doubled between the end of December and mid-June, when it hit a record, and has since then lost almost 50 per cent.
CNA Games Guess Word Crack the word, one row at a time Buzzword Create words using the given letters Mini Sudoku Tiny puzzle, mighty brain teaser Mini Crossword Small grid, big challenge Word Search Spot as many words as you can Show More Show Less Tokyo dived 7 per cent as Kioxia and SoftBank gave back more than 10 per cent, with Advantest more than 8 per cent lower. TSMC's 7 per cent drop dragged Taipei's Taiex around 8 per cent lower.
In Singapore, the Straits Times Index was down more than 2 per cent as of 11am. Local semiconductor solutions company AEM Holdings plunged as much as 13 per cent in early trade, while semiconductor equipment supplier UMS Integration plunged as much as 15.2 per cent.
Hong Kong, Shanghai and Sydney were also in the red.
"The blood is in the streets, folks," said Neil Wilson at Saxo Markets.
"The fear is a total momentum unwind as Democrats pace the frontier and kibosh data centre buildout... this looks totally overdone but the nature of sell-everything of this market means we need to look for some stability first."
Data centres have faced broad opposition from US voters across the political spectrum, and many midterm winners have pledged to put the brakes on such projects.
Analysts said investors were also spooked by a call from progressive US Senator Bernie Sanders for a national moratorium on their building.
Michael Hewson at MCH Market Insights said investors were selling up because of "concerns that we might see greater opposition to AI buildout plans, with the results in Texas prompting concerns that politicians in the state might target Elon Musk's Tesla and SpaceX due to his support for Trump".
The results compounded already heightened fears about the hundreds of billions firms had pumped into the sector and when they would see a return, while the recent spike in borrowing costs also fuelled concerns about their financial position.
The eye-watering rally in many companies' valuations had also caused unease on trading floors.
New York's Nasdaq plunged 5.5 per cent in its worst day - percentage-wise - since April last year when Trump unveiled his wide-ranging global tariffs. The S&P 500 tanked more than 4 per cent and the Dow more than 3 per cent.
Bloomberg said the Philadelphia Semiconductor Index had collapsed around 16 per cent this week, putting it on course for its worst run since April last year.
Trump blamed the collapse on the Democrats, writing on Truth Social: "The Stock Market crashed today because the Dumocrats had a big Tuesday - So sad to see, you only have yourselves to blame! President DONALD J. TRUMP."
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