Asian markets staged an afternoon relief rally on Wednesday, November 4, reversing an early selloff triggered by the United States midterm results, as the Democrats’ sweep of Congress gave investors clarity even while raising fears of tighter regulation of artificial intelligence spending.
The turnaround was broad but uneven: mainland Chinese and Hong Kong shares surged, South Korea closed higher, while Japan and Taiwan pared their losses but still finished lower.
The closing picture
South Korea’s Kospi gained 0.62 percent to close at 5,683.80, after swinging between an intraday high of 5,828.13 and a low of 5,421.72. It opened higher on an overnight rebound in United States semiconductor shares, reversed as election results emerged, then recovered late in the session despite heavy foreign selling.
Hong Kong’s Hang Seng Index rose 1.67 percent to 23,919.50, closing at its session high for a fourth straight gain, after opening lower. In mainland China, the Shanghai Composite climbed 2.16 percent to 3,686.17, the Shenzhen Component surged 4.22 percent to 11,335.69 and the ChiNext index jumped 6.40 percent, as Beijing stepped up measures to support the stock market.
Japan’s Nikkei 225 fell 1.42 percent to 62,188.63, its third straight loss, after touching an intraday low near 60,030. The broader Topix dropped 0.89 percent to 3,895.38. Taiwan’s Taiex fell 0.83 percent to 42,948.91, a fifth consecutive decline, while Australia’s S&P/ASX 200 slipped 0.59 percent to 8,834.50 and India’s Sensex rose 0.43 percent to 77,246.77.
Why markets whipsawed
In the early session, tech-heavy indexes spent most of the day deep in the red as results pointed to Democratic gains, with investors fearing that tighter scrutiny of AI data centres under a Democratic Congress could reduce AI investment. Daishin Securities analyst Lee Kyoung-min cited that concern, while noting eco-friendly sectors gained on hopes of policy support.
By the afternoon, markets pulled off their lows in what analysts described as relief that some clarity had emerged, even if the result was not what most market participants had expected. The Wall Street Journal described the session as midterm whiplash, with the hardest-hit indexes completely erasing their losses in some cases.
How this differs from the morning session
This is the closing picture, not the morning selloff. Earlier on Wednesday, the Nikkei had slid more than 4 percent intraday and United States stock futures and the dollar fell as results poured in, as covered in Global Stocks Slump as Dollar Slides After Midterm Sweep and Nikkei 225 Falls 4 Percent on US Midterm Results. By the close, much of that damage had been retraced in China, Hong Kong and South Korea, but not in Japan, Taiwan or Australia.
What to watch
Investors will now watch how Wall Street trades the same results, whether AI-regulation fears resurface, and whether Beijing adds further market support measures. No outcome is predicted here.
Frequently asked questions
Why did Asian markets fall first? Early results pointed to a Democratic sweep, raising fears of tighter regulation of AI spending and data centres, which hit tech-heavy indexes hardest.
Which markets rose on November 4? Mainland China, Hong Kong, South Korea and India closed higher; Japan, Taiwan and Australia closed lower.
Did Japan recover its losses? Only partly: the Nikkei recovered from near 60,030 intraday but still closed 1.42 percent lower at 62,188.63.
Sources:
The Wall Street Journal, Asia Markets Get Midterm Whiplash as Selloff Gives Way to Relief Rally
AJU Press, KOSPI rebounds, Asian markets diverge after US vote
TradingView / dpa-AFX, Asian Shares Mixed As Democrats Retake US Congress
SKN Finance, Asian Markets Rebound on November 4, 2026
