Shares plunge in Tokyo and Seoul after US tech rout

06/11/2026 07:42 AST

Japanese and South Korean shares plunged on Friday after a sharp sell-off in US stocks overnight, driven by worries that the midterm election results could slow or derail the boom in artificial intelligence (AI) data center investment. Tokyo's Nikkei 225 index fell 5.1 percent to 56,930 points in early trade, while Seoul's Kospi dived 8.5 percent to 4,923, triggering a circuit breaker that suspended trading for 20 minutes. Investors had initially welcomed Tuesday's heavy defeat of President Donald Trump's Republican Party. But they have since grown anxious that the political shift could hit AI investment seen as key to economic growth. On Wall Street, the tech-focused Nasdaq closed down 5.5 percent, its worst session in percentage terms since April 2025, as Nvidia and other chip stocks were battered. In Seoul, memory chip makers whose products help power AI tools also slumped, with Samsung Electronics down nearly 10 percent and SK hynix more than 11 percent. In Tokyo, Tokyo Electron fell around 9 percent and Kioxia 13 percent. "Following the Democratic victory in the midterm elections, concerns about stricter regulations on AI-related technologies have led to a sell-off across the entire (US) market, particularly in technology stocks," online brokerage Monex said. "In particular, there are concerns that stricter regulations on data center construction will slow down construction projects." Governments and tech giants worldwide are racing to build data centers to train and run AI models, in a global construction boom costing hundreds of billions of dollars.

AFP