Asian Markets Split After US Midterms, With Oil Sliding to $93.91

Asian stock markets moved in opposite directions on Thursday in response to the results of the US midterm elections. The divergence reflected the sector-specific risks and opportunities that investors associated with the new balance of power in Washington.

In South Korea, the Kospi index traded 3.5% lower at 5,484.38 by late morning. The index had briefly fallen more than 4% earlier in the session due to heavy selling of computer chipmakers. Samsung Electronics shares dropped 5.7%, and SK Hynix, a memory chipmaker, lost 7.4%.

Japan's Nikkei 225 index declined 0.5% to 61,914.53. SoftBank Group, an investor in OpenAI, fell 5.3%. Equipment manufacturers Tokyo Electron and Advantest saw sharper declines, dropping 7.7% and 9.4% respectively. Taiwan's Taiex index lost 1.6% in trading.

Indices less exposed to the artificial intelligence sector generally gained ground. The Hang Seng index in Hong Kong jumped 2.8% to 24,597.59. The Shanghai Composite index in China edged up 0.1%. In Australia, the S&P/ASX 200 rose 1.9% to 9,003.40.

The moves followed a strong session on Wall Street on Wednesday, where the S&P 500 jumped 1.6%. The Dow Jones Industrial Average surged more than 1,500 points, and the Nasdaq composite rose 1.4%. This rally occurred after President Donald Trump's party lost its sole control of Washington.

Investors viewed the split control of the government as a factor that reduces the risk of major economic changes. However, specific stocks tied to prominent political figures suffered. Trump Media & Technology Group shares fell 24.5% on Wednesday. The stock, which supports the Truth Social platform, had dropped to $4.49 from a peak of $175 five years ago.

Companies associated with Elon Musk also declined. Tesla fell 3.3%, and SpaceX sank 3.8%. Musk, a former top adviser to Trump, is considered a possible target for investigations by the incoming Democratic-controlled Congress.

Energy markets reacted to expectations that a Democratic Congress might pressure the administration to reduce military involvement in Iran. Brent crude oil plunged 8.7% on Wednesday to $94.62 per barrel. By early Thursday, the price settled near $93.91, marking a drop of 0.8%. US benchmark crude fell 1% to $87.27.

Lower oil prices negatively impacted major oil producers. ExxonMobil fell 4.6%, and ConocoPhillips dropped 5.2%. Defense stocks also declined as investors priced in a potential reduction in the war effort. Lockheed Martin sank 6.9%, Northrop Grumman fell 4.5%, and General Dynamics lost 2.6%.

Renewable energy stocks moved higher on the prospect of legislative support from the new Congress. First Solar rose 4.6%, and Enphase Energy climbed 3.7%. In currency markets, the US dollar slipped to 157.96 Japanese yen from 158.41 yen, while the euro rose to $1.1256 from $1.1228.