Asian stock markets posted mixed performances Thursday as sharp losses in artificial intelligence-related shares weighed on Japan and South Korea, offsetting gains in several other markets following the US midterm elections.
South Korea's Kospi plunged more than 5%, while Japan's Nikkei 225 dropped nearly 2%. Oil prices also declined, and US stock futures showed mixed movements after Wall Street rallied Wednesday following the Republican Party's loss of control of Congress.
US stocks have historically tended to rise after midterm elections, regardless of the outcome. However, technology shares came under pressure as investors assessed how a Democratic-controlled Congress could affect the artificial intelligence investment boom.
South Korea's Kospi, which has experienced significant volatility amid AI-driven buying and selling, fell 5.3% to 5,383.80. Samsung Electronics shares dropped 7.6%, while memory chipmaker SK Hynix lost 9.4%.
In Tokyo, the Nikkei 225 declined 1.8% to 61,077.90. SoftBank Group fell 6.9%, Tokyo Electron dropped 9.5% and semiconductor testing equipment maker Advantest plunged 15%.
Taiwan's Taiex also declined 3.2%.
Meanwhile, Hong Kong's Hang Seng Index climbed 3.2% to 24,675.22, while Shanghai's Composite Index edged down 0.1% to 3,682.30.
Australia's S&P/ASX 200 gained 2.6% to 9,065.10, and India's Sensex advanced 2%.
Swissquote analyst Ipek Ozkardeskaya said global markets largely welcomed the Democrats' victory, with investors hoping it could encourage efforts to ease tariffs and strengthen US trade relations with other economies.
However, she warned that the political shift could create challenges for the AI industry, which is already facing questions over heavy investment, future returns and financing.
On Wall Street, the S&P 500 gained 1.6% on Wednesday, the Dow Jones Industrial Average surged more than 1,500 points, or over 3%, and the Nasdaq Composite advanced 1.4%.
Hospital operators and dollar-store companies serving lower-income consumers helped lead the rally.
Investors generally favour divided political control in Washington because it reduces the likelihood of major economic policy changes. However, company earnings and interest rate movements are expected to remain more important factors for the broader stock market over time.