Asian equities advanced Thursday as oil prices slid 8.7% following the Democratic sweep in U.S. midterm elections, with Hong Kong’s Hang Seng rising 2.8% and Australia’s S&P/ASX 200 gaining 1.9%, though South Korea’s Kospi briefly fell more than 5% on a semiconductor selloff that triggered a trading halt, Bloomberg reported.
The election outcome reshaped regional risk appetite within hours. Democrats’ victories ended Republican sole control of Washington, prompting investors to price in split government, lower energy prices, and a weaker dollar while punishing shares tied to U.S. artificial intelligence. The divergence was stark: markets with little exposure to American chip demand rallied, while Seoul and Tokyo absorbed heavy losses in memory and equipment makers.
Three Numbers That Define Thursday’s Session
- Brent crude fell 8.7% to $94.62 a barrel, its lowest in roughly two months, easing inflation pressure across Asia’s import-dependent economies.
- South Korea’s Kospi dropped as much as 5.2%, triggering a five-minute “sidecar” trading curb as Samsung Electronics (KRX: 005930) fell 5.7% and SK hynix (KRX: 000660) lost 7.4%.
- Hong Kong’s Hang Seng jumped 2.8% to 24,597.59, with the Hang Seng Tech Index surging 5% on strength in Chinese chipmakers and internet names.
Brent Crude Slides 8.7% as Democrats Take Congress
A Democratic-led Congress is expected to pressure the Trump administration to pull back from the war with Iran, and defense contractors felt that immediately: Lockheed Martin (NYSE: LMT) sank 6.9%, Northrop Grumman (NYSE: NOC) fell 4.5%, and General Dynamics (NYSE: GD) lost 2.6%, Yahoo Finance reported. The prospect of reduced military escalation sent Brent crude plunging 8.7% to $94.62 a barrel, while U.S. West Texas Intermediate fell 8.29% to $88.12, both reaching two-month lows, Investing.com noted.
Here is the math: Asia imports enormous quantities of crude, so every decline eases inflation and improves trade balances for India, Japan, South Korea, and much of Southeast Asia, Asia Times reported. Lower energy prices also boosted bond markets, with the 10-year Treasury yield falling six basis points to around 4.9% and the dollar sliding against major currencies — a combination Asia Times called a “powerful tailwind” for the region into 2027.
Kospi Trading Halt as Samsung and SK Hynix Sink
South Korea’s Kospi dropped as much as 5.2% — enough to trigger a five-minute sell-side trading curb — before settling 3.5% lower at 5,484.38 by late morning. Samsung Electronics dropped 5.7% and SK hynix shed 7.4% — with some reports showing intraday declines above 8% and 9% — as investors worried that a Democratic Congress would tighten regulation of the AI buildout, Investing.com and Yahoo Finance reported.
Tokyo followed a similar pattern. The Nikkei 225 fell 0.5% to 61,914.53, dragged down by AI-linked names: OpenAI investor SoftBank Group (TYO: 9984) shed 5.3%, chipmaking equipment maker Tokyo Electron (TYO: 8035) skidded 7.7%, and testing equipment maker Advantest (TYO: 6857) tumbled 9.4%. Taiwan’s Taiex lost 1.6%. The selling extended losses in shares related to artificial intelligence, Yahoo Finance noted, with Tesla (NASDAQ: TSLA) falling 3.3% on Wall Street amid speculation that a Democratic Congress could target former Trump adviser Elon Musk with investigations.
Hong Kong and Shanghai Outperform on China Rate Cut
Chinese markets bucked the regional tech selloff. The Shanghai Composite edged 0.1% higher, while Hong Kong’s Hang Seng climbed 2.8% with the Hang Seng Tech Index soaring 5%, led by Alibaba (HKEX: 9988), Tencent (HKEX: 700), JD.com (HKEX: 9618), and Xiaomi (HKEX: 1810), Futu reported. Investing.com reported that the rally was buoyed by the People’s Bank of China’s decision to lower the interest rate on its relending facility for share buybacks by 25 basis points to 1%, alongside Beijing’s ongoing efforts to reduce dependence on U.S. semiconductor technology. According to CITIC Securities calculations cited by Futu, the Hang Seng Tech Index’s forward price-to-earnings ratio stood at roughly 14.5 times as of October 25, placing it at the 7th percentile historically.
| Market / Asset | Move | Level |
|---|---|---|
| Hong Kong Hang Seng | +2.8% | 24,597.59 |
| Australia S&P/ASX 200 | +1.9% (one report +2.4%) | 9,003.40 |
| Shanghai Composite | +0.1% | — |
| South Korea Kospi | -3.5% (intraday -5.2%) | 5,484.38 |
| Japan Nikkei 225 | -0.5% | 61,914.53 |
| Brent crude oil | -8.7% | $94.62/bbl |
| WTI crude oil | -8.29% | $88.12/bbl |
Dollar Weakens and Treasury Yields Fall on Gridlock Hopes
The U.S. dollar slipped to 157.96 Japanese yen from 158.41, while the euro rose to $1.1256 from $1.1228, Yahoo Finance reported. A weaker dollar cuts the cost of servicing dollar-denominated debt across Asia and takes pressure off regional currencies that have spent two years defending against a strong greenback, Asia Times noted. Investors generally prefer split control of Washington because it lessens the risk of transformative economic changes, and Wednesday’s Wall Street rally — the Dow surged more than 1,500 points, the S&P 500 jumped 1.6%, and the Nasdaq rose 1.4% — carried into Thursday’s Asian session for markets less exposed to AI.
Jordan Watson, a portfolio manager at Tandem Investment Advisors, said that he would not interpret Wednesday’s equity performance as a sign that everything was back to normal; rather, it seemed more like a rational correction in market expectations regarding the scale of capital investment in AI infrastructure and its potential returns, in comments reported by Futu.
Looking ahead, Asia Times argued the Democratic sweep is a bigger win for the region than markets initially realized: cheaper money, cheaper energy, and a less dominant dollar should reward a much wider set of Asian companies over the coming year than the narrow AI champions punished on election night. The region, it concluded, is better positioned now than it was before America voted on November 3.
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial advice.
