Shares advance after Wall Street rally following US midterm elections

Asian markets advanced on Thursday following a rally on Wall Street after the US midterm elections. Hong Kong's Hang Seng rose 2.8% to 24,597.59, while Shanghai's Composite index increased marginally. Australia's S&P/ASX 200 gained 1.9% to 9,003.40. Brent crude oil prices hovered near $94, marking a two-month low. The selling of AI-related shares continued to drag down stock prices.

South Korea's Kospi briefly tumbled over 4%, closing 3.5% lower at 5,484.38. Samsung Electronics and memory chipmaker SK Hynix saw significant declines, with Samsung Electronics dropping 5.7% and SK Hynix losing 7.4%. In Tokyo, the Nikkei 225 slipped 0.5% to 61,914.53. On Wall Street, hospital owners and dollar stores that catered to low-income Americans led the stock market rally.

However, the election's impact on the broad market in the long run remains uncertain. Stock prices are more influenced by company profits and interest rates rather than political control in Washington. Nonetheless, investors favor a divided government as it reduces the risk of significant economic changes. Investors are wary of potential challenges for Twitter, AI sector, and Elon Musk's businesses, which heavily backed Republicans.

Trump Media & Technology Group, impacted by a 24.5% drop, was one of the worst performers, trading at $4.49. Musk's ventures, including Tesla (down 3.3%) and SpaceX (down 3.8%), also faced setbacks. Concerns about a Democratic-controlled Congress potentially reversing Trump's policies on the Iran conflict weakened stocks of defense companies.

Lockheed Martin, Northrop Grumman, and General Dynamics all saw declines. Similarly, oil stocks faced pressure from the potential shift in military spending. ExxonMobil and ConocoPhillips experienced losses. The US dollar weakened to 157.96 Japanese yen, while the euro strengthened to $1.1256.