Business · World News Bureau

Asia's blue-wave split: cheap oil, chip risk

Democrats' sweep of the US Congress sent Brent to its lowest close since August, a relief for Asia's oil importers. The same vote hit Asia's AI trade in Tokyo, Taipei and Seoul, while Beijing rallied on state support.

LSN World News · 5 November 2026

Asia's blue-wave split: cheap oil, chip risk

<p><em>Special Reporting from LSN News, adapted from today's Asia Money Map episode. <a href="https://youtu.be/icnPqq4FVW0" target="_blank" rel="noopener">Watch the video on YouTube.</a></em></p>

<p>Brent crude settled at $94.62 a barrel on Wednesday, down 8.7% in a single session and its lowest close since 31 August, according to Reuters. The trigger was not in the Gulf but at the American ballot box, and the shockwaves split Asia in two: cheaper oil for the region's importers, and fresh risk for its chipmakers.</p>

<h2>The midterm result and the oil slide</h2>

<p>Democrats won control of both the House and the Senate in Tuesday's midterm elections, a major setback for President Donald Trump. Reuters reports oil traders are betting that a weaker White House, facing a Congress that controls war funding, has more reason to seek a deal to end the war with Iran. Trump told the Financial Times there were no immediate plans to strike Iran, and on Wednesday he acknowledged the war had played a role in his party's defeat.</p>

<p>For Asia's big oil importers, that is the number of the week. In India, the rupee gained for a fourth straight session, settling at 94.65 per dollar, and the 10-year government bond yield fell nearly 11 basis points, its sharpest drop in seven months, according to Business Standard. Reuters says most Asian currencies gained between 0.1% and 0.3% as the dollar slid. MUFG told Reuters a Democratic sweep "would likely be modestly positive for Asian FX."</p>

<h2>Tokyo, Taipei and Seoul: the AI trade takes the hit</h2>

<p>The same results landed hard on the AI trade. In Tokyo, the Nikkei fell nearly 5% at one point, to around 60,000, before closing down 1.4% at 62,188. SoftBank Group, Advantest, Tokyo Electron and Kioxia each fell more than 3%. Taiwan's Taiex fell for a fifth straight session. In Seoul, the Kospi recovered to close up 0.6%, but foreign investors still sold a net 2.51 trillion won of Korean shares, according to AJP.</p>

<p>Why would a vote in America hit chipmakers in Asia? Look at Texas. Democrat Gina Hinojosa ousted Governor Greg Abbott after promising a moratorium on all data centre approvals until state lawmakers pass new protections. Reuters notes the Texas grid operator was tracking more than 400 gigawatts of data centre projects seeking to connect. Those servers run on chips and equipment from Taiwan, Korea and Japan. Daiwa Asset Management's Kazunori Tatebe said the market will be cautious about Texas data centre projects, but added that Japanese AI stocks "have become cheap. Their profits are solid."</p>

<p>Beijing went its own way. China's stock market jumped more than 2%, its best day in seven months, according to Reuters. The People's Bank of China cut the rate on its relending facility for share buybacks by a quarter point, to 1%, and said banks have applied for more than 200 billion yuan, about $30 billion, in quotas. Chipmakers SMIC and Hua Hong surged. That is state money, not blue-wave money: Reuters notes the CSI 300 is still down 11% this year.</p>

<h2>Our read: an oil story first, a chip story second</h2>

<p>The blue wave splits Asia in two. Oil importers, from India to the Philippines to Japan, get relief at the pump and in their currencies. Chip exporters, Taiwan and Korea above all, carry a new political risk on the demand side of the AI boom. J.P. Morgan Asset Management's Tai Hui asked how much of the sell-off was the election and how much was "the AI story that's fermented since three or four weeks ago," and said he thinks it is the latter.</p>

<p>Two warnings apply. First, the oil relief is a bet, not a ceasefire. Gulf exports averaged 17.1 million barrels a day in October, roughly three-quarters of pre-war levels, according to Vortexa ship tracking data. Enverus's Carl Larry said he is "more concerned that we can see an escalation in Iran sooner than a resolution." Second, trade. Rabobank's Philip Marey says a gridlocked Congress may push Trump further into foreign and trade policy, including pending Section 301 investigations on global excess capacity. That lands squarely on Asia's factories.</p>

<p>Investors will watch Indonesia's third-quarter growth figures, with the economists' consensus around 5.2%, and Bank Negara Malaysia's rate decision at 3pm Malaysian time on Thursday.</p>

<p>For Asia, this election is an oil story first and a chip story second. A barrel near $95 is a direct tax cut for the region's importers. But the oil relief rests on peace talks that have not happened, while the chip risk rests on a Texas moratorium that has been promised. Asia should bank the cheaper oil, and price in a harder road for the AI build-out. The ballot box has moved Asia's money map. It has not redrawn it.</p>

<h2>Sources</h2>

<ul>

<li><a href="https://www.channelnewsasia.com/business/oil-slumps-after-midterm-election-rebuke-trump-raises-bets-iran-war-exit-6519506" target="_blank" rel="noopener">Reuters via CNA</a></li>

<li><a href="https://www.business-standard.com/markets/news/bond-yields-fall-11-bps-rupee-gains-as-oil-prices-slide-after-us-midterms-126110401818_1.html" target="_blank" rel="noopener">Business Standard</a></li>

<li><a href="https://www.financialexpress.com/world-news/us-midterm-election-results-what-democrats-win-means-for-oil-prices-and-indian-rupee/4376731/" target="_blank" rel="noopener">Financial Express (Reuters)</a></li>

<li><a href="https://en.infomaxai.com/news/articleView.html?idxno=146952" target="_blank" rel="noopener">Yonhap Infomax</a></li>

<li><a href="https://www.investing.com/news/stock-market-news/texas-data-centers-face-uncertain-future-afterhinojosa-wins-governors-race-5000781" target="_blank" rel="noopener">Reuters via Investing.com</a></li>

<li><a href="https://www.texastribune.org/2026/11/04/data-center-texas-pause-gina-hinojosa-governor-policies/" target="_blank" rel="noopener">Texas Tribune</a></li>

<li><a href="https://www.abc.net.au/news/2026-11-05/asx-markets-business-live-news-november-5-2026/107347286" target="_blank" rel="noopener">ABC News live (Reuters)</a></li>

<li><a href="https://www.devdiscourse.com/article/international/4001553-chinese-banks-have-applied-for-30-billion-worth-of-loan-quota-to-fund-share-purchases" target="_blank" rel="noopener">Reuters via Devdiscourse</a></li>

<li><a href="https://english.news.cn/20261104/df5c41a879274395a6af13ef47144392/c.html" target="_blank" rel="noopener">Xinhua</a></li>

<li><a href="https://www.cnbcindonesia.com/research/20261103155131-128-781948/siapkan-mental-besok-ada-pengumuman-penting-yang-bisa-guncang-ri" target="_blank" rel="noopener">CNBC Indonesia</a></li>

<li><a href="https://corpwb01.bnm.gov.my/monetary-stability/mpc-meetings" target="_blank" rel="noopener">Bank Negara Malaysia</a></li>

</ul>