Nikkei plunges nearly 6%, Kospi triggers circuit breaker amid global AI sell-off

Asian markets fell sharply on Friday, November 6, extending a Wall Street rout of Thursday driven by fears that the Democratic midterm sweep, a policy stalemate and a widespread data centre moratorium in the US will slow down the AI boom.
Japan's Nikkei closed down 5.96%, or 3,643 points, at 57,435, its fifth straight fall. It has lost more than 7,200 points in five sessions, its worst week since 2020. The broader TOPIX fell 5.9%, with all 33 sectors lower. South Korea's Kospi dropped more than 8% at the open, triggering a 20-minute circuit breaker, then was reported near 5,060, down about 6%. Taiwan fell more than 8% at one point.
AI-linked stocks took the heaviest hits. Samsung Electronics fell nearly 10% and SK Hynix about 12%. Kioxia dropped 14%, TSMC fell as much as 8.5%, and SoftBank slid 11%, with the cost of insuring its debt reaching a four-year high. Australia's ASX 200 slipped 0.5% to 9,020.80.

Following the Wall Street lead

Democrats won both the House and the Senate this week, and investors worry the new Congress will bring tougher oversight and limits on data-centre construction. On Thursday, the Nasdaq composite fell 5.5%, its steepest drop since the April 2025 tariff sell-off, leaving it 12% below its record close a month ago. The Nasdaq 100 lost 6.3%, or about $2.5 trillion, and the Philadelphia chip index slid 12.2%. About $3 trillion was wiped off S&P 500 companies. The VIX, Wall Street’s primary "fear gauge" used to measure expected stock market volatility, rose to 28.18, its biggest jump since April 2025.

India found optimism in global AI rout

Indian market was surprisingly resilient to the slide due to negligible exposure to AI and semiconductor stocks. After opening flat, the Sensex rose 1,025 points, or 1.29%, to 80,335 by early afternoon, and the Nifty gained more than 200 points to near 24,745. That extends Thursday's rally, when the Sensex jumped 2.6% and the Nifty 2.4%. The Nifty IT index rose 1% to 2%, and Mahindra & Mahindra gained about 5%. Brent crude hovered near $100 a barrel.
In Europe, the Stoxx 600 fell about 1.2%, and Euro Stoxx 50 futures were down 1%. US Dow futures were down about 1%, while Nasdaq 100 futures gained 0.9% to 1.4% as dip buyers returned. Gold hovered near $4,100 an ounce.

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US midterms hint at clear disdain for data centres

The fears have a basis in how US citizens voted on Tuesday. Voters in 10 states decided 41 local data-centre measures, and nearly all went against the industry, according to Ballotpedia and CNBC.

Ohio alone had 21, and more than half of the measures began as citizen initiatives. At least 14 municipalities passed outright bans or severe restrictions, including Sunbury, effectively stalling a proposed $2 billion Amazon data centre project

Voters in Emporia, Kansas, Alhambra, Maine and California, backed a ban on data centre construction. Joliet, Illinois, voted nearly 80% to restrict data centres. Bloomington, Illinois, backed an advisory moratorium with 78%.
The industry's one clear win was Harwood, North Dakota, where 75% of 430 voters rejected an added review of large industrial projects. Voters in Wilmington, Ohio, also supported rezoning land for a data centre. In a CNBC voter poll, 56% said data centres were a crucial or major factor in their vote.