This update was written automatically with AI from market data and news wire reports, and published without review by a person.
Key Takeaways
- Hong Kong’s Hang Seng Index (HSI) surged over 3%, led by a 5.35% rally in the Tech Index, as investors cheered a potential shift in US foreign policy following a Democratic sweep in the midterm elections.
- Brent crude futures plunged nearly 9% overnight, falling below $100 per barrel for the first time since early October, on growing expectations of a resolution to the US-Iran conflict.
- The Euro (EURUSD) rose 0.25% to $1.1257, hitting a one-month high as US Treasury yields declined and the US Dollar weakened following the election results.
- Data center and semiconductor stocks faced significant pressure, with South Korea’s KOSPI sliding 4% and Taiwan’s benchmark falling 1.8% amid fears of tougher AI infrastructure regulations.
- China’s coking coal futures rallied over 3% on the Dalian Commodity Exchange, driven by supply disruptions and seasonal heating demand.
Asian Markets Rally on US Political Shift
Asian equities saw a broad-based rally on Thursday as the clear outcome of the US midterm elections reduced market uncertainty. The Hang Seng Index (HSI) jumped 2.9% to 24,618, reaching a five-week high, while the Hang Seng TECH Index soared over 5%. Major tech heavyweights led the charge, with Meituan (03690) and Xiaomi (01810) both gaining approximately 8%.
The market sentiment was bolstered by the Democratic victory in both chambers of Congress, which investors interpret as a check on the current administration's military options in the Middle East. This political shift has significantly lowered the "war premium" previously baked into global asset prices. In Malaysia, the benchmark index rose 1.3%, hitting its highest level since October 6, supported by the improved global risk appetite.
Energy and AI Infrastructure Under Pressure
In contrast to the broader market rally, the energy and technology infrastructure sectors faced a sharp sell-off. Brent crude fell to near $94 a barrel, extending a weekly drop that could be the largest since 2020. Market participants are increasingly pricing in a "peace dividend," as a potential de-escalation in the Iran conflict could restore global oil flows to a surplus of 1.4 million barrels per day.
Data center operators and equipment suppliers also retreated following Democratic wins in key hubs like Texas and Georgia. Investors are repositioning for tougher scrutiny of AI infrastructure spending and potential moratoriums on new construction. Analysts at Citrini Research noted that the market may be "calling the top" on AI infrastructure spending estimates, shifting focus toward margin capture and capital efficiency rather than raw expansion.
Currencies and Commodities Adjust to New Outlook
The US Dollar weakened across the board, allowing the Euro (EURUSD) to stabilize above $1.1250. Sterling (GBPUSD) made modest gains, trading near 1.3485 ahead of the Bank of England's interest rate decision. The BoE is widely expected to hike rates by 25 basis points to 4.00%, though the focus remains on the vote split and future guidance.
In the commodities space, China's coking coal futures rose more than 3% to 1,391.5 yuan, supported by tighter domestic production and upcoming winter heating needs. Meanwhile, the Taiwan Dollar hit a low of 32.963 against the greenback, its weakest level since early 2025, as the sell-off in regional semiconductor giants like Samsung Electronics (005930) and SK Hynix (000660) weighed on the currency.
Legal and Fiscal Developments in Greater China
In Hong Kong, a High Court judge praised pro-democracy activist Joshua Wong for providing "evidence of remorse and rehabilitation" during a sentencing hearing for national security charges. Wong, who pleaded guilty to conspiracy to collude with foreign forces, faces a potential life sentence, though his legal team is arguing for a reduced term of three to ten years based on his cooperation and time already served.
On the fiscal front, China’s Finance Ministry successfully auctioned one-month deposits at a 1.42% yield. This move is part of a broader "proactive fiscal policy" aimed at expanding domestic demand and supporting the real economy. The ministry has pledged to accelerate the issuance of government bonds to maintain a 4.7% GDP growth target for the year.
Automated market updates written with AI from market data and news wire reports, published without human review.