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[MARKET ANALYSIS] Asia-Pac tech giants hit as markets continue to digest the consequences of the Democratic sweep in the midterms

Newsquawk Staff ·

  • Asia-Pac stocks are lower across the board, with the ASX 200 holding up given its lack of tech names. However, the focus remains on semiconductor names and those that are key to the AI buildout, given the blue wave in the US midterms. The selloff appeared to reflect fears of an AI slowdown following the Democratic sweep in the midterms.
  • ASX 200 (-0.9%) is printing losses but to a lesser degree, as its composition lacks tech names. Macquarie (-4.3%) reported net profit that slightly beat estimates; however, losses are seen following news that the prudential regulator found a breach of the group’s non-bank businesses and will further review Macquarie’s capital settings.
  • Nikkei 225 (-6.3%) follows the broader market lower, with its main tech names opening with double-digit losses (Tokyo Electron -13%, SoftBank -14%, Kioxia -14%). Bucking the trend is Sony (+0.4%), after its operating profit beat estimates and it raised its FY guidance. Outside of the tech giants, Japan Tobacco is tumbling after four of its Russian units were placed under temporary administration.
  • KOSPI (-7.4%) is hit the hardest, triggering multiple sidecars as SK Hynix and Samsung Electronics drag the index lower. South Korean finance minister said the government will take necessary measures to prevent the stock market from overreacting and materially deviating from fundamentals.
  • Hang Seng (-1.2%) and Shanghai Comp (-1.7%) follow their Asian peers lower. The PBoC injected CNY 226bln via overnight reverse repos for a CNY 52bln net drain, with the rate at 1.25%.
  • US equity futures find a base following Thursday's selloff, with the NQ futures nearing the 27k handle.
  • European equity futures indicate a negative cash market open with Euro Stoxx 50 futures -0.9% after the cash market closed with losses of 0.3% on Thursday.

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