Nov 6 (Reuters) – Stock markets fell as investors feared a Democratic victory in the midterm elections would lead to regulation and a slowdown in the AI boom that is propelling IT supply chain stocks around the world.
The Nasdaq fell 5.5% on Thursday, the biggest drop since the “Liberation Day” rout triggered by 2025 tariffs.
In Asia on Friday, South Korea’s KOSPI fell 6% and Taiwan’s benchmark index fell 4.5%, to record its biggest weekly decline in more than two decades. (MKTS/GLOB)
Here’s what market players are saying:
CHRISTOPHER FORBES, HEAD OF ASIA AND MIDDLE EAST, CMC MARKETS, SINGAPORE:
“Actually, it’s a bit of a disaster.
“(The clients) were buyers of indices, stocks, and they were all executed.
“All night, all day, we had customer margin calls, customer complaints, … because it’s a very emotional thing, right? People are attached to their positions and their opinions on a stock or an outcome and you tell them: look, you just lost money.
“And it’s not just a slap in the face in terms of valuation. It’s basically a six-year policy and structural change that says we’re now going to pause, we’re now going to cool AI, we’re now going to cool data centers, approvals and capital markets.”
DONG BAOZHEN, PRESIDENT OF LINGTONG SHENGTAI, BEIJING:
“The liquidation shows that AI’s stock prices were based on rosy illusions about the future, and now that illusion is gone,” Dong said.
“The U.S. stock market has been the standard bearer and backbone of the global AI bull run. Now that backbone has broken. Can AI bull markets elsewhere hold up on their own?”
JASON LUI, HEAD OF APAC EQUITY DERIVATIVES STRATEGY, BNP PARIBAS, HONG KONG:
“We’re actually getting more and more inquiries about domestic China, because what we’ve noticed is that over the last month, Chinese policymakers have stepped up their stabilization measures.
“Clients tend to view China’s domestic trade as a potential means of diversification from their global portfolio which tends to be driven more by US AI.”
ALLEN HUANG, VICE PRESIDENT, EQUITY TRADING DEPARTMENT OF MEGA FINANCIAL HOLDING:
“Today we will inevitably see further liquidation of margin accounts, which suggests that we are likely in the final stages of capitulation.
“Even TSMC flipped its daily limit breaker at one point, which usually marks the end of a downturn. When TSMC sells, it means all stocks have been completely undervalued.”
STEVE SOSNICK, CHIEF STRATEGIST, INTERACTIVE BROKERS, NEW YORK:
“Investors were already beginning to wonder whether all the copious spending on AI would yield sufficient returns to justify billions in debt and equity.
Gn bussni
