KOSPI Falls 3.25% And Nikkei Slips 0.44% After US Midterm Results As AI Regulation Fears Hit Semiconductor Stocks

Asian equities declined on 05 November 2026. The slide follows the US midterm elections, which have revived concerns about tougher artificial intelligence (AI) regulation. Technology stocks were under the microscope again as investors reassessed heightened scrutiny of AI firms.

This could slow investment and delay data centre projects, affecting expectations for the technology hardware sector. Buying interest shifted towards automakers and consumer-related businesses.

Korea Composite Stock Price Index (KOSPI) dropped 184 points, or 3.25%, to 5,500. Japan’s Nikkei 225 fell 275 points, or 0.44%, to 61,913.5, reversing its earlier gains. In contrast, Hong Kong’s Hang Seng advanced 751.6 points, or 3.1%, to 24,671.

Semiconductor Stocks Lead The Asian Market Sell-Off

Major South Korean semiconductor companies, Samsung Electronics and SK Hynix, declined more than 5% each. This added further pressure to South Korea’s benchmark index.

The weakness reflected investor concerns over semiconductor demand and the pace of AI infrastructure spending under a Democrat-controlled US Congress.

Automakers And Consumer Stocks Gain

The sell-off in semiconductor stocks was accompanied by buying in other sectors. Toyota Motor and Honda Motor gained around 5% each, helping Japan’s broader Topix index rise 1.4% despite the Nikkei’s decline.

Chinese internet stocks also attracted investors, lifting the Hang Seng Tech Index by around 5%. Automakers drew support from expectations of a possible rollback of US tariffs, while lower crude oil prices improved sentiment towards traditional industries.

Brent crude fell another 0.5% to $94.12 a barrel after dropping nearly 9% on Wednesday, 04 November 2026.

Asian Market Sentiment Remains Subdued

Tech stocks continued under selling pressure, and market sentiment across Asian markets was broadly weak. The Nikkei turned gains into losses earlier, while the KOSPI fell more than 3%. All this reflects the atmosphere of caution.

The market response implies investors are re-evaluating their exposure to AI stocks and semiconductor businesses, while turning to sectors that may gain from lower energy prices and a shift in US trade policy.

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