Asian stock markets climb after earlier tech rout

Asian stock markets have rebounded after last week’s tech rout triggered by the Democratic Party’s sweeping victory in the US midterm elections.

Key indexes in Japan, Taiwan and Australia rose on Monday, following a rebound on Wall Street on Friday.

Taipei’s Taiex led the gains, closing up 4.94 percent.

In Tokyo, the benchmark Nikkei 225 rose 2.33 percent, while the S&P/ASX 200 in Sydney edged up 0.099 percent.

In Seoul, the KOSPI fell 0.8 percent after earlier rising about 1.7 percent.

Hong Kong’s Hang Seng Index dipped 0.22 percent.

“We view the recent drawdown in AI infrastructure names as a function of tighter financial conditions, growing scrutiny over credit availability for neocloud companies, and uncertainty over potential delays to the AI build-out post the US midterm election results,” Cameron Chui, Asia equity strategist at JP Morgan Private Bank in Hong Kong, told Al Jazeera.

“That being said, AI demand and adoption remain strong, 2027 capex visibility remains high, and a meaningful valuation reset has already taken place that at least partly factors in these concerns,” Chui added.

“In Asia, we see attractive upside potential in both Taiwan and South Korea, while acknowledging that earnings downside risks have materially risen for 2028, widening the range of potential outcomes.”

Futures for Wall Street’s benchmark S&P 500 index were up 0.17 percent as of 07:30 GMT, while those tied to the tech-heavy Nasdaq 100 were down 0.24 percent.

Futures for both indexes dipped earlier following US-based chip giant Nvidia’s announcement that it would investigate its CEO Jensen Huang over a romantic relationship he had with a woman accused of being a Chinese spy.

Nvidia’s board of directors said that while it had confidence in Huang and had no reason to believe that national security or company secrets were compromised, an independent inquiry would examine “all available information”.

The board said Huang supported the inquiry and pledged his full cooperation.

“The Board prioritises US national and economic security, which is paramount to the interests of NVIDIA and its shareholders,” the company said.

The stock market rebound comes after the US midterm results prompted a $2.5 trillion sell-off on Wall Street on Thursday amid concerns that Democratic-controlled legislatures could slow the rollout of data centres used to power artificial intelligence.

The tech rout spilled into Asia on Friday, with the Nikkei 225 and KOSPI plunging about 6 percent and 9 percent, respectively, and the Hang Seng Index dropping more than 1 percent.