Asian markets tumble: Nikkei 225 crashes 3,000 points, KOSPI tanks 4% amid US midterm vote count, AI sell-off

Democratic candidates are winning the US midterm election with a majority mark as the side is set to take control of the US Congress for the remainder of US President Donald Trump’s presidency.

Media reports showed that Trump himself acknowledged that the Democrats did a “good job” and that higher fuel prices in the American economy impacted the overall performance of the Republicans in the midterm elections.

With a Democratic majority in the US Senate, the impact of the same will be visible across the markets, as the party is expected to impose tighter regulations and scrutiny in the technology and AI sector.

The potential for further crackdown on AI spending and the tech sector impacted the overall sentiment in the market, turning away foreign investors from tech and AI stocks in developed markets, including Asia, powering the massive sell-off in Asian equities.

With the funds flowing out of Asian equities, investors were shifting to safe-haven bets, powering the demand for gold and US Treasuries. Data showed that due to the elevated demand, COMEX gold surged 2.4% while US Treasury yields declined to 4.91% levels on November 4.

This comes at a time when crude prices remain highly volatile, trading within the range of $106.2 to $108.7 per barrel with heightened risk of further escalations in West Asia.

Asian market investors were also in a sell-off mode as Japan's manufacturing sector witnessed its slowest level of growth in the last seven months as cost pressure overhang impacts the economy.

How did indices perform on November 4?

Investors were clearly turning away from tech and AI chipmaking stocks in major markets like Wall Street and Asian indices while tracking crude oil prices and the geopolitical developments in West Asia.

Data showed that the Japanese benchmark index, Nikkei 225, crashed 4.8% or 3,051.76 points intraday to hit a low of 60,030.10 during Wednesday’s market, in comparison to 63,081.86 points at the previous trading close.

Nikkei 225 ended 1.42% lower at 62,188.63 points, according to MarketWatch data.

South Korea’s KOSPI tumbled 4% intraday to hit an intraday low of 5,421.72 points during the trading session on November 4, in comparison to 5,648.79 points at the previous equity market close, according to the exchange data.

However, after trading lower for the majority of the day, KOSPI recovered during the final hours to close in positive territory with a 0.62% gain at 5,683.80 points after the market session on Wednesday.

In contrast, the Hang Seng was trading 1.5% higher at 23,887.73 points as of 3:35 pm (Hong Kong time), in comparison to the previous market close of 23,525.97 points. This comes after the index lost 0.60% intraday to hit a low of 23,385.29 points on Wednesday.

China’s Shanghai Composite ended 2.16% higher at 3,686.17 points on November 4, as investors powered buying in the second half of the trading session.

Both India (NIFTY50 up 0.23%) and Singapore (FTSE down 0.12%) indices were trading with high volatility due to the mixed cues in the market.

Japan’s PMI growth at 7-month low

Japan’s manufacturing Purchasing Managers' Index (PMI) data for October 2026, released by S&P Global this week, showed that the country’s manufacturing PMI eased to 53.3 in October from 54.1 in September.

This comes as the country is facing rising cost pressure arising due to the elevated cost of raw materials in the market amid the West Asia conflict and production, new order taking also witnessed overall impact in momentum in the period.