AI Selloff Deepens Across Asia & Governments Move to Stabilize Markets - Asia Market Wrap

Global stocks extended their selloff across Asia amid concerns that the Democrats’ decisive US midterm election victory could lead to tighter AI industry regulations. The MSCI Asia Pacific Index fell 3.8%, while Japan’s Nikkei 225 plunged 5.8%, its biggest one-day decline since April 2025. South Korea’s Kospi dropped as much as 8.8%, triggering a circuit breaker, with Samsung and SK Hynix both losing more than 5%. Taiwan’s benchmark fell 4.5%, entering a bear market.

Asian authorities moved to contain the selloff, with South Korea temporarily waiving a rule requiring brokerages to maintain collateral worth at least 140% of margin loans to limit forced selling. Taiwan’s financial regulator was also expected to announce stabilization measures. Regional stocks subsequently pared some losses amid a recovery in US equity futures and reports of market support, with Nasdaq 100 futures rising 0.8%. China’s 10-year bond yield fell to a record intraday low amid ample liquidity and demand for haven assets, while Treasuries held Thursday’s gains.

The Dollar strengthened against all its Group-of-10 peers, and Brent crude rose 1.4% to $99.70 per barrel after gaining 3.9% in the previous session. Global markets have swung sharply this week as investors initially anticipated that a Democratic sweep of Congress would accelerate an end to the Iran conflict, before concerns over tighter US data center regulations sparked a broad tech selloff. The Philadelphia Semiconductor Index has fallen almost 16% this week, putting it on track for its worst weekly performance since April last year.