Asia stocks tumble as tech shares slide on U.S. election results

Asian stocks fell sharply on Wednesday, with technology shares leading losses as early U.S. midterm election results pointed to potential Democratic gains in Congress, raising concerns over artificial intelligence spending, regulation and the outlook for U.S. fiscal policy.

U.S. stock futures weakened, with Nasdaq futures dropping more than 2% and S&P 500 futures falling 1.2%, as early results increased the likelihood of Democrats gaining control of the House and potentially the Senate.

Investors worried that a shift in political power could complicate President Donald Trump’s policy agenda and increase regulatory scrutiny of technology companies.

Nikkei, KOSPI slide as tech losses weigh

Japan’s Nikkei 225 dropped 4.5%, while the broader TOPIX index slipped 3.2%. 

South Korea’s KOSPI slid 3.8%, with Samsung Electronics (KS:005930) and SK Hynix (KS:000660) falling 4.3% and 6.1% respectively.

Technology stocks remained under pressure after recent concerns over elevated valuations, heavy artificial intelligence investment and uncertain returns triggered sharp losses across the sector.

The election-driven retreat came despite strong results from Advanced Micro Devices, which reported third-quarter revenue of $13.38 billion, up 45% from a year earlier, and forecast fourth-quarter revenue of about $17 billion.

Early election results raised the prospect of political gridlock in Washington.

Singapore stocks near correction

Singapore’s Straits Times Index fell 1.4% to 5,193.61, down about 11% from September’s all-time high of 5,828.5 points.

If losses hold till market close, Singapore shares would technically enter correction territory on Wednesday, as losses in banking and other heavyweight stocks added to pressure from a broader regional sell-off. 

Elsewhere, China’s Shanghai Composite edged down 0.1%, while the blue-chip Shanghai Shenzhen CSI 300 fell 1%. Hong Kong’s Hang Seng also edged down 0.1%.

Australia’s S&P/ASX 200 fell 1%, while India’s Nifty 50 gained 0.5%, bucking the regional trend.

Investors were also monitoring developments in U.S.-Iran peace talks. Tehran and Washington are reportedly reviewing fresh proposals from mediators aimed at resolving their differences and avoiding a return to full-scale war.

Oil prices remained volatile as traders weighed the possibility of easing supply disruptions against the risk of renewed escalation.

In China, the RatingDog services purchasing managers’ index fell to 50.8 in October from 51.6 in September, signalling the slowest expansion in three months.