Post-US Midterm Elections: Sell-off in Chip Stocks and Drop in Oil Prices

After the US midterm elections, investors moved away from chip manufacturers, causing a divergence in Asian stock markets. In South Korea, technology stocks fell by more than 7%, while Chinese internet companies Tencent and Alibaba rose by over 6%. South Korea's Kospi index dropped by 5.2%, while Nasdaq 100 futures fell by 1.2%. Australia's benchmark index increased by 2.5%, and India's Nifty 50 index rose by 1.8%. Brent crude oil fell by 0.7% to $93.94 per barrel after a drop of over 8% on Wednesday. The expectation that the Democrats securing a majority in Congress could accelerate efforts to end the Iran war pressured oil prices. US Treasury bonds gained value for the second consecutive day, while the dollar weakened against all G10 currencies. The US Treasury Department changed its guidance on bond sales. The Republican Party's defeat in the midterms highlighted divisions within the party. It is assessed that the Reserve Bank of Australia may have reached the end of its interest rate hikes.

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