Asian shares mostly advance following US midterms, though Kospi falls on selling of chipmakers

Title: Asian shares mostly advance following US midterms, though Kospi falls on selling of chipmakers 1 Asian equity markets opened higher on Tuesday, buoyed by a surge in U.S. stocks that followed the announcement of the mid‑term election results. The Dow Jones Industrial Average leapt more than three percent in early trade, while the Nasdaq and S&P 500 also posted gains of 3.5 % and 2.8 % respectively..

Investors welcomed the unexpected shift of the House majority to the GOP, citing a renewed confidence in market‑friendly policies. The rally, however, proved uneven across the region, with some markets recording modest gains while others slipped. 2 The main driver of the lift in Asian markets was the strong performance of U.S..

tech giants, which posted record highs in the first trading hour. Apple, Amazon and Alphabet posted earnings beats that exceeded consensus estimates, sending global indices in a positive direction. This uptick resonated with investors in Japan and Hong Kong, where technology and consumer discretionary sectors outperformed by 2.1 % and 1.9 % respectively..

The sentiment was further underpinned by the Federal Reserve’s dovish comments about the potential for easing in the next policy meeting. 3 In Tokyo, the Nikkei 225 advanced by 1.4 %, buoyed by a surge in semiconductor stocks and a rally in automotive names such as Toyota and Honda. Analysts highlighted that the momentum was sustained by expectations that the new administration will support infrastructure spending that could indirectly benefit Japanese exporters..

Despite a 0.8 % decline in the Bank of Japan’s policy rate, the market remained upbeat, with futures trading at near‑record highs ahead of the upcoming Monetary Policy Committee meeting. 4 The Shanghai Composite Index gained 1.8 % after a positive response to the U.S. Chinese markets benefited from a spike in foreign portfolio inflows, as global risk appetite returned following the U.S..

In particular, the information technology and green‑energy sectors saw double‑digit gains, reflecting investor optimism about future policy support. Nonetheless, caution remained due to lingering concerns over regulatory crackdowns on technology firms, which could dampen the upside in the medium term. 5 Meanwhile, the Hong Kong Hang Seng Index pushed up 1.6 %, buoyed by gains in financial and real‑estate stocks..

The rally was sparked by a surge in foreign investment following the U.S. election, as the market reassessed the prospects for a more stable macro‑environment. Analysts noted that the Hong Kong market’s sensitivity to U.S..

policy changes remained high, and the positive sentiment was likely to continue if the U.S. government maintains its commitment to trade‑friendly policies. 6 In contrast, Korea’s Kospi Index fell by 2.3 % on Tuesday, a stark departure from the broader regional trend..

The decline was primarily driven by a mass sell‑off of chipmakers, including Samsung Electronics and SK Hynix, which saw their shares drop by 4.1 % and 3.8 % respectively. Investors cited concerns over a possible slowdown in demand for semiconductors, exacerbated by the ongoing global supply‑chain adjustments and a potential slowdown in the automotive sector. 7 The chipmakers’ slump was compounded by a sharper-than‑expected rise in the U.S..

Treasury yield curve, which weighed on technology stocks across the region. Analysts warned that if the U.S. continues to tighten monetary policy, the cost of capital for high‑growth firms could rise, leading to a re‑valuation of their future earnings..

This sentiment was reflected in the steep decline of the KOSPI’s technology component, which fell by 5.2 % over the course of the day. 8 In the Philippines, the Philippine Stock Exchange Index edged higher by 0.9 %, reflecting optimism about domestic consumption and a positive outlook for the country’s tourism sector. The local market’s modest gains were supported by a rally in the banking and utilities sectors, which benefited from an uptick in the Philippine peso against the dollar..

Analysts suggested that the positive trajectory could be maintained if the U.S. election outcomes continue to fuel global risk sentiment. 9 Singapore’s Straits Times Index mirrored the broader trend, climbing 1.5 % as investors welcomed the robust U.S..

The market saw notable gains in the technology and consumer sectors, buoyed by positive earnings reports from several listed companies. The Singapore market’s resilience was also attributed to the central bank’s decision to keep its policy rate unchanged, which reassured investors that monetary conditions would remain accommodative. 10 The UK’s FTSE 100 saw a modest 0.6 % rise, with the market reacting positively to the U.S..

British banks and energy companies recorded gains, driven by a rally in the U.S. market that boosted confidence in global trade. Analysts noted that the UK market remains sensitive to both U.S..

policy developments and the ongoing Brexit negotiations, but the current positive sentiment suggests a short‑term bullish outlook. 11 In the United Arab Emirates, the Dubai Financial Market Index posted a 1.2 % gain, reflecting optimism about rising oil prices and the U.S. The market benefited from a rally in the energy sector, with ADNOC and Etihad Rail sharing in the gains..

Investors highlighted that the UAE’s diversified economy and its proactive stance towards attracting foreign investment could sustain the current momentum.