Tech firms claw back some losses after midterms rout, eyes on Nvidia

Tech firms clawed back some of last week's losses on Monday fuelled by AI regulation worries, though gains were tempered by news of a probe into Nvidia boss Jensen Huang amid claims of an affair with a Chinese spy.

Chipmakers and other companies linked to the artificial intelligence boom took a hammering in the days after Tuesday's US midterms, which saw Democrats sweep both chambers of Congress in a rebuke to Donald Trump and his Republican Party.

The results suggested voters were angry at the president's Iran war and tariffs, which have sent prices soaring, as well as a sharp kickback against the huge data centre buildout that has taken place across the country in recent years.

That has led to speculation the new Congress will seek to wind in tech firms' construction drive, which could put thousands of jobs at risk.

The uncertainty comes with traders already nervous about when the hundreds of billions of dollars pumped into the sector would actually see a profit.

After taking a lashing on Thursday, Wall Street enjoyed a little stability at the end of last week, and Asia -- which had suffered a hammering itself on Friday -- largely followed suit to start this week.

Japan's Nikkei 225 rose more than two percent thanks to gains in Tokyo Electron, Advantest and Sony.

Taipei jumped more than four percent as the Tawainese government pledged support for the market, including curbs on short selling and the back-up of a US$15.2 billion stock stabilisation fund.

There were also gains in Shanghai, Bangkok and Jakarta.

However, Seoul gave up an early rally to end lower, with chipmakers SK hynix and Samsung losing most of their gains. Hong Kong, Wellington, Manila and Mumbai also slipped, while London, Paris and Frankfurt opened lower.

"Investors will be watching carefully this week to get a sense as to whether these gains are just short-covering, bargain hunting or the beginning of something more sustainable in nature," said Sally Auld at National Australia Bank.

"Fears around AI regulation, the outlook for (capital expenditure) and free cash flow have been the driver of risk reduction in recent weeks and these issues are not likely to be resolved with any conviction in the near term.

"Nonetheless, the valuation of many tech stocks now looks less expensive."

However, a little more uncertainty was injected into markets with news that Nvidia's board was launching an investigation into whether Huang had been targeted in a foreign espionage plot following his admission that he was unfaithful to his wife.