Asian Shares Mixed As Democrats Retake US Congress

Asian stocks ended mixed on Wednesday after Democrats took control of both houses of Congress in a dramatic win in the US midterm elections, raising uncertainty over tech regulation, trade policy and the US budget deficit.

Meanwhile, after a gauge of US job openings exceeded economist estimates, the probability of the US Federal Reserve hiking rates by 25 basis points in December rose to 80% in money markets.

Gold prices jumped more than 2% to hold above $4,000 an ounce in Asian trade, driven by a softer dollar and lower Treasury yields.

The US dollar dropped against all of its Group-of-10 peers while the benchmark 10-year Treasury note declined seven basis points to 4.89% as a commanding “blue wave” forced traders to rethink US President Donald Trump’s remaining policy agenda and the political trajectory into 2028.

Brent crude futures were modestly higher at $103.76 a barrel after seeing sharp swings in the previous session amid uncertainty over the US-Iran peace talks.

Qatar said it saw hope for an interim deal as both the US and Iran evaluate new proposals put forward by mediators, despite fresh US strikes and continued threats to shipping through the Strait of Hormuz.

However, Iran’s national security chief indicated in a social media post that Washington’s response to Iran’s demands for reopening the Strait of Hormuz and resuming peace talks was insufficient.

Trump told US broadcaster Fox News on Tuesday that he is “not looking to kill lots of people” in Iran following the midterm elections, but warned Washington would act decisively if needed.

Mainland Chinese and Hong Kong markets rose as a crushing defeat for US President Trump in the midterm elections opened the door to legislative deadlock.

China’s Shanghai Composite index rallied 2.16% to 3,686.17 while Hong Kong’s Hang Seng index surged 1.67% to 23,919.50, led by technology and healthcare stocks.

Investors shrugged off the results of a private survey that showed China’s services sector expanded at its slowest pace in three months in October, with business confidence easing amid fierce competition and rising costs.

Japanese markets fell sharply as trading resumed after a public holiday. The Nikkei average lost more than 3% to hit a three-month low before recovering some lost ground to settle 1.42% lower at 62,188.63. The broader Topix index dropped 0.89% to 3,895.38.

Tech stocks suffered heavy losses, with Japanese chip-testing equipment maker Advantest, Japanese chip-equipment maker Tokyo Electron, Japanese telecom and investment group SoftBank Group and Japanese memory-chip maker Kioxia Holdings falling 3-5% on worries that Democratic control of both chambers in the US could lead to tighter regulation of data-centre projects and slower AI infrastructure spending.

Seoul stocks swung between gains and losses before closing higher as battery and pharma stocks rose on hopes for policy support by the Democratic Congress in the US. The Kospi index climbed 0.62% to 5,683.80.

Australian markets closed lower after purchasing managers’ index data showed Australia’s services sector contracted in October for the first time since May.

The benchmark S&P/ASX 200 dropped 0.59% to 8,834.50, dragged down by miners.