Asian stock markets climbed on Monday following a sharp rebound on Wall Street, recovering from a sell-off last week that wiped $2.5 trillion in value from U.S. markets after Democrats won sweeping control in midterm elections. Taipei's Taiex rose 4.94 percent and Tokyo's Nikkei 225 gained 2.33 percent, while Sydney's S&P/ASX 200 edged up 0.099 percent. Hong Kong's Hang Seng Index dipped 0.22 percent, and Seoul's KOSPI fell 0.8 percent after rising earlier in the session.
The Thursday sell-off was driven by investor concern that Democratic-controlled legislatures could slow the rollout of data centers used to power artificial intelligence. The rout spilled into Asian markets on Friday, with the Nikkei 225 and KOSPI plunging about 6 percent and 9 percent respectively, and the Hang Seng Index dropping more than 1 percent.
Nvidia announced that its board of directors would launch an independent inquiry into Chief Executive Officer Jensen Huang over a romantic relationship he had with a woman accused of being a Chinese spy. The board said it had confidence in Huang and no reason to believe national security or company secrets were compromised, but that the inquiry would examine all available information. Huang supported the inquiry and pledged full cooperation. The company said the board prioritizes U.S. national and economic security as paramount to the interests of Nvidia and its shareholders.
Cameron Chui, Asia equity strategist at JP Morgan Private Bank in Hong Kong, attributed the recent decline in AI infrastructure stocks to tighter financial conditions, growing scrutiny over credit availability for neocloud companies, and uncertainty over potential delays to AI buildout following the midterm election results. Chui said AI demand and adoption remain strong, 2027 capital expenditure visibility remains high, and valuations have reset to partly account for investor concerns.