This update was written automatically with AI from market data and news wire reports, and published without review by a person.
Key Takeaways
- South Korea’s KOSPI index plummeted 8.5%, triggering a "sidecar" mechanism and circuit breakers as tech shares collapsed following a massive Nasdaq selloff.
- Japan’s Nikkei 225 fell over 5%, hitting its lowest level since April, led by double-digit losses in semiconductor and AI-related stocks like Tokyo Electron and Advantest.
- Prime Minister Sanae Takaichi proposed using accelerated Bank of Japan (BOJ) ETF disposal revenue to fund vital economic security investments and public expenditure.
- Texas Governor-Elect Gina Hinojosa announced plans for a moratorium on new data centers, citing the need for legislative protections for citizens and the state's power grid.
- White House officials are convening for emergency assessments after a "blue wave" in the US midterm elections shifted control of Congress to Democrats.
Asian Markets Reel from Tech-Led Liquidation
Equity markets across Asia experienced a brutal session on Friday as a deepening technology selloff in the United States spread to regional heavyweights. The Korea Exchange (KRX) was forced to trigger a sidecar mechanism and a Stage 1 circuit breaker as the KOSPI 200 futures plunged more than 5%, eventually leading the main index to dive 8.5% to 4,923 points. This marks the first time the KOSPI has traded below the 5,000 level in nine months, driven by massive losses in chipmakers Samsung Electronics (005930), which fell 10%, and SK Hynix (000660), which dropped over 11%.
In Tokyo, the Nikkei 225 (^NI225) index shed 5.1% to close near 56,930, following the tech-heavy Nasdaq Composite's entry into correction territory. The rout was exacerbated by Japan Tobacco (2914), which hit its daily lower limit as a wave of sell orders prevented trading. Investors are increasingly anxious that a shift in US political power will lead to tighter regulations on artificial intelligence and a slowdown in data center expansion.
Takaichi Targets BOJ Windfall for Growth
Amid the market turmoil, Japanese Prime Minister Sanae Takaichi outlined a strategic plan to utilize the Bank of Japan's accelerated disposal of exchange-traded funds (ETFs). The central bank recently announced it would more than double its annual ETF sales to ¥860 billion ($5.5 billion) starting in January. Takaichi stated that the resulting revenue should be used to finance investments in areas vital to Japan's economic security and to help cover bond payments, thereby securing funding for public expenditure designed to stimulate the economic cycle.
Finance Minister Satsuki Katayama confirmed that the government expects a substantial increase in payments from the BOJ's surplus earnings. Analysts estimate the faster sales pace could generate an additional ¥800 billion in annual revenue. This non-tax revenue is seen as a critical pillar for Takaichi's broader agenda, which includes a 14-year growth investment plan and increased defense outlays.
US Political Shift Rattles Industry Sentiments
The global market volatility is closely tied to the fallout from the US midterm elections, where a Democratic victory has upended expectations for the tech and energy sectors. In the US, White House officials are reportedly meeting to determine a path forward following the Republican defeat. Meanwhile, House Democratic Leader Hakeem Jeffries has already begun asserting influence, demanding increased House participation and opposing the Senate's proposed energy permitting deal, according to POLITICO.
The impact is being felt acutely in the data center industry, a key driver of AI growth. Texas Governor-Elect Gina Hinojosa has vowed to implement laws shielding citizens from the rapid expansion of data centers, calling for a moratorium on new approvals. Hinojosa's stance, focused on protecting the state's power grid and water resources, has added a new layer of regulatory risk for major tech infrastructure projects.
Automated market updates written with AI from market data and news wire reports, published without human review.