A Democratic sweep of Congress triggered significant rotation trade across Asian markets Thursday. Shares of heavyweight memory chipmakers Samsung Electronics and SK Hynix sank over 6% each, pulling down South Korea's benchmark Kospi by more than 4% on concerns regarding the AI buildout outlook. Conversely, automakers such as Toyota Motor and Honda Motor surged approximately 5% each, contributing to a 1% gain for Japan's Topix index.
This market shift was driven by worries over potential delays in data center construction, amplified by Democratic messaging on AI fears during recent midterm elections. Investors also viewed automakers as potential beneficiaries should there be a pullback in former President Donald Trump's tariff policies. Market analysts noted a clear continuation of rotation away from sectors exposed to regulatory headwinds.
Tim Waterer, chief market analyst at KCM Trade, observed that the market is penalizing parts most vulnerable to these political shifts, specifically highlighting the semiconductor sector's current exposure.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing