Asian stock markets recorded sharp declines on Friday, led by a 5.96% drop in Japan’s Nikkei 225 and a retreat in South Korea’s Kospi, as the Democratic Party’s midterm election victories sparked widespread investor anxiety over potential restrictions on artificial intelligence, according to CNN Arabic.
Asian Equities Suffer Steep Liquidations Amid Heavy Tech Selling
- Asian equities suffered broad liquidations as the MSCI Asia-Pacific index fell roughly 4%, driven by heavy selling in technology and semiconductor supply chains.
- South Korean retail investors faced steep losses as the Kospi index dropped 44% from its June record, wiping out 1.7 trillion dollars in market capitalization.
Asian Markets Slide Into Bear Territory Following US Technology Sell-Off
The regional downturn followed a brutal session on Wall Street where the Nasdaq Composite plunged 5.5% on Thursday, marking its worst single-day performance since April 2025. According to Asharq Al-Awsat, the Nikkei 225 closed down 6.1% at 57,332.92 points, breaching the 60,000 threshold for the first time in six months. Japanese technology heavyweights including SoftBank Group (TYO: 9984) and Advantest (TYO: 6857) led the regional retreat.
The contagion spread rapidly across credit markets. SoftBank dollar-denominated bonds took the heaviest hits in Asian debt trading, with notes maturing in 2032 dropping 0.9 cents, while its equity shares slid as much as 16%. Individual fortunes also suffered under the weight of the liquidation wave. Bloomberg data indicates that 22 billionaires across China, Japan, Taiwan, and South Korea sustained a combined net worth reduction exceeding 18 billion dollars. SoftBank founder Masayoshi Son absorbed the steepest damage, watching his personal valuation contract by 3.9 billion dollars down to approximately 29 billion dollars.
| Index / Asset | Market Region | Percentage Change | Key Driver |
|---|---|---|---|
| Nikkei 225 | Japan | -5.96% to -6.1% | Tech sell-off, entering bear market |
| Kospi | South Korea | -6.0% to -6.3% | Retail liquidation, AI spending jitters |
| MSCI Asia-Pacific | Asia-Pacific | -4.0% | Broad regional equity liquidation |
| Nifty 50 | India | +2.0% (Weekly gain) | Diverged from regional declines |
Hindustan Petroleum Struggles With Tanker Constraints in the Strait of Hormuz
While equity markets reeled, physical energy markets faced persistent logistical friction. Indian refiner Hindustan Petroleum Corporation announced it is encountering severe difficulties securing maritime transport for crude oil shipments through the Strait of Hormuz.
Macroeconomic Divergences Across Japanese and Chinese Industrial Sectors
Contrasting the broader regional sell-off, Indian equities bucked the trend. The Nifty 50 index advanced 2% on Friday, securing its strongest weekly performance in over five years. Concurrently, the safe-haven Japanese Yen strengthened 0.2% against the dollar to 157.34 in early Friday dealing, building on a 0.6% gain from the previous session.
The 10-year Japanese Government Bond yield fell 12 basis points to 2.635%, while the 5-year yield declined 14 basis points to 2.05%, and the 2-year yield dropped 13 basis points to 1.725%. Meanwhile, geopolitical frictions compounded corporate headwinds in Tokyo, as the Japanese government lodged a formal protest against Moscow after Russian President Vladimir Putin signed a decree transferring management of Japan Tobacco‘s local assets to a Russian entity.
In mainland China, Bloomberg Economics warned that the Democratic legislative majority could constrain AI hardware demand, threatening Chinese export volumes and intensifying domestic oversupply. Net exports drove roughly 40% of China’s economic expansion in the third quarter. Compounding this exposure, state-owned Chinese refiners are trimming November diesel exports due to depleted inventory levels, with energy consultancies scaling back shipment forecasts.
