Islamabad (GNP): Asian stocks fell on Wednesday as technology shares led regional losses. Investors were weighing the outcome of the US midterm elections and doubts over heavy spending on artificial intelligence.
The broadest index of Asia-Pacific shares outside Japan, compiled by Morgan Stanley Capital International (MSCI), fell 0.5 per cent and reversed earlier gains. South Korea’s Kospi declined 1.6 per cent, while Japan’s Nikkei dropped 3 per cent on its return from a holiday.
The sell-off came even though US chipmaker Advanced Micro Devices (AMD) reported stronger-than-expected third-quarter earnings and forecasts. The results offered some reassurance about demand for AI technology, yet investors stayed worried about whether the AI investment boom can last. They also remained wary of elevated valuations across the technology sector.
Election uncertainty added to that caution. Investors are assessing what Tuesday’s midterm results mean for President Donald Trump’s economic and regulatory agenda. Democrats secured important Senate victories, and early results suggested they could win control of the House of Representatives. That outcome could influence government spending priorities, fiscal policy and regulatory scrutiny of major technology companies.
US market indicators show where the pressure is heaviest. S&P 500 futures fell 0.8 per cent, while Nasdaq futures lost 1.8 per cent, which points to particular weakness in technology shares. The dollar weakened 0.32 per cent against a basket of major currencies. The yield on the benchmark 10-year US Treasury note fell six basis points to 4.906 per cent, a sign of stronger demand for government bonds.
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Oil prices also stayed volatile as investors followed diplomatic efforts to end the wars in Ukraine and Iran. Crude hit a four-week low in the previous session on hopes of progress toward peace. Even so, concerns over attacks and disruption to shipping through the Strait of Hormuz continued to affect energy markets. The waterway previously handled about one-fifth of global oil supplies, so any disruption there feeds directly into inflation expectations.
China added another development to the day’s market news. The People’s Bank of China announced that it will raise the foreign-exchange reserve requirement for financial institutions from 4 per cent to 6 per cent, effective 15 November. The move aims to discourage excessive appreciation of the yuan after its recent strength against the dollar.
Investors are expected to stay cautious as they wait for final US election results, assess technology earnings and follow geopolitical developments. Whether the biggest technology companies can sustain growth and justify their heavy AI spending will remain a key factor shaping market sentiment.
