US Vs Asia Stocks: China Outpaces Peers As Support Measures Stabilize Markets Amid Midterms-Led Tech Selloff
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The iShares MSCI China ETF (MCHI) is up more than 5% so far this week as Chinese regulators have rolled out multiple market measures to stabilize struggling capital markets.
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However, concerns about a Democratic curb on AI policies spilled over into South Korean and Taiwanese markets.
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The iShares MSCI South Korea ETF (EWY) and the iShares MSCI Taiwan ETF (EWT) are headed 0.5% and 3.99% lower this week.
The U.S. midterms weighed on stock markets across the globe, including in Asia, as a blue tidal sweep raised concerns about a slowdown in AI buildout and triggered a selloff in technology stocks.
China’s markets have held up better than peers, outpacing its U.S. and Asian counterparts so far this week as a slew of support measures to stabilize struggling capital markets seems to have paid off.
US Markets Vs Asia Markets
As of Wednesday, U.S. benchmark indexes and Chinese and Japanese stocks are poised to end the week higher, while South Korean and Taiwanese stocks are eyeing the red territory.
The iShares MSCI China ETF (MCHI) is up more than 5% so far this week as Chinese regulators have rolled out multiple market measures, including swap operations and an upgraded lending facility for stock buybacks by listed companies, in a bid to stabilize struggling capital markets.
Authorities have also urged index heavyweights and leading technology companies to try to stabilize their share prices, while also considering plans to ease margin rules to boost market liquidity.
Meanwhile, in the U.S., November midterms were squarely in focus, with markets reacting positively to a Democratic sweep of both chambers of Congress. The SPDR S&P 500 ETF Trust (SPY), the SPDR Dow Jones Industrial Average ETF (DIA) and Invesco QQQ Trust (QQQ), which tracks the Nasdaq-100, are all headed toward a green close this week.
The iShares MSCI Japan ETF (EWJ) is also headed higher this week.
Democratic Win Stokes AI Concerns
However, concerns about a Democratic curb on AI policies spilled over into South Korean and Taiwanese markets. The iShares MSCI South Korea ETF (EWY) and the iShares MSCI Taiwan ETF (EWT) are headed 0.5% and 3.99% lower this week.
Yorkville Advisors partner and managing director Dan Ives said in a post on X, “Democratic blue tidal wave across the Senate and House was a seismic shift that will have a negative impact on the pace of the AI Revolution buildout in the US over the next few years. Will slow the pace of the planned 800 to 1,000 datacenters across the US fueling the AI Revolution…some investors will like the “slower pace”…others view it as adding risk. We estimate 10% of datacenters will not happen now.”
However, Fundstrat’s Tom Lee took an opposing stance, saying in an interview on Wednesday that the Democratic win could prove positive for stocks and lead to a 15% to 20% rally in tech stocks, calling Wednesday’s tech selloff a “knee-jerk reaction.”
Retail Stance: US Vs Asia Markets
On Stocktwits, retail sentiment around SPY, QQQ and MCHI was ‘bearish’ at the time of writing.
Meanwhile, retail sentiment around EWY, EWJ and EWT was ‘neutral,’ while it was ‘extremely bullish’ for DIA.
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Aashika Suresh has no position in any of the stocks mentioned in this article. StockTwits’ news team content is for informational purposes only and is not intended as investment advice. For more, see our editorial policy. This article was originally published on StockTwits.
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