Blue wave reshapes Asia's winners and losers, Manishi Raychaudhuri says
SPY•Manishi Raychaudhuri says the U.S. midterm election results could reshape Asian markets through changes in AI, energy and trade policy. India’s Sensex rose 7% during election week, while South Korea’s KOSPI and Taiwan’s TAIEX each fell 12%; Brent crude has since dropped nearly 19%.
1. AI jitters hit North Asia
The Democratic takeover of Capitol Hill in the November 3 midterm elections prompted concern that incoming leaders would scrutinize AI companies, including data-center construction and tax breaks. South Korea’s KOSPI and Taiwan’s TAIEX each fell 12% in election week, while India’s Sensex gained 7% and Singapore’s Straits Times Index declined 3%.
2. Energy and trade shifts
Raychaudhuri says a possible de-escalation of the U.S.-Iran conflict and lower oil prices could benefit Asian energy importers. Brent crude fell nearly 19% to below $96 a barrel after the midterms. He says lower oil prices could support trade balances and currencies, while declining oil prices and AI demand together could weigh on North Asian tech exporters.
3. India seen as a beneficiary
Raychaudhuri says India could benefit from lower commodity prices, reduced trade pressure and demand for generic drugs and outsourced pharmaceutical manufacturing. Indian manufacturers supply about 40% of U.S. demand for generics, while South Korea’s Samsung Biologics is cited as a contract manufacturer. He cautions that U.S. policy could still change, including on Middle East conflicts, tariffs and AI development.
