Nov 6 (Reuters) - Stock markets were tumbling as fear gripped investors that the Democratic sweep at the midterm elections would lead to regulation and a slowdown of the AI boom that has been propelling US growth and computer component supply chain stocks all over the world.
The Nasdaq fell 5.5% on Thursday in the biggest drop since the tariff-triggered "Liberation Day" rout in 2025.
On Friday in Asia trade in Seoul was halted after the open when stocks plunged 8%, and in Tokyo the Nikkei slumped more
than 6%. [MKTS/GLOB]
Here's what market participants are saying:
MICHAEL MCCARTHY, CEO, MOOMOO AUSTRALIA AND NZ, SYDNEY:
"It's pretty clear there's been a real shift in sentiment.
"Market turning points are often accompanied by strong disagreement, and that shows up in the market by huge swings in either direction. And that's what we appear to have — and last night's emphatic sell-down suggests that is the direction that we're now headed in.
"It's quite possible this could be a significant turning point for the US market ... I think a lot of the bigger players in the US have declared, in last night's action, that the music has stopped. It's game over."
MARK FUCHS, CIO, FUCHS CAPITAL PARTNERS, SINGAPORE:
"The Democrats had come in with a more circumspect view on data centres and AI ... so there's the broad picture which is probably a little bit of a spending reduction, by virtue of higher bars on data centres generally.
"Asia tech, broadly, is getting further repriced downward on expectations that the demand would be somewhat more constrained ... as well as markets pricing cost of capital higher since the Fed started raising rates in September.
"The more important thing, if you take the newer factor of Democrat data centre constraint off the table, (is) the reality is that this sector had been repricing downward for well over a month.
"We are preferring more non-AI related sectors and countries that offer higher nominal GDP and durable domestic growth stories like domestic India, while hedging the currency and index."
(Reporting by Tom Westbrook and Rae Wee in Singapore; Compiled by Tom Westbrook; Editing by Christian Schmollinger)
