Asian semiconductor and AI-linked stocks fell sharply Thursday as investors assessed whether Democrats’ victories in the US midterm elections could lead to tighter oversight of data-center construction, while lower oil prices supported other sectors.

South Korea’s SK Hynix declined 5.1% and Samsung Electronics lost 7.6% during Asian trading, dragging the benchmark Kospi down 5.3%. Taiwan’s Taiex fell 3.2%, while Japan’s Nikkei 225 dropped 1.8%.

The Korea Exchange activated a sell-side “sidecar” mechanism at 0116GMT, temporarily suspending program trading for five minutes as losses intensified.

Japanese chip equipment manufacturers also faced heavy selling. Advantest fell 14.7%, Tokyo Electron declined 9.4% and technology investor SoftBank Group dropped 6.8%.

The declines reflected concerns that greater scrutiny of AI infrastructure could slow investment in new facilities and demand for the chips and equipment used to build them.

Democrats captured both chambers of Congress and won key gubernatorial races, including Texas and Georgia, where opposition to the rapid expansion of data centers has focused on electricity costs and pressure on local resources. The results raised the prospect of additional restrictions on construction in major industry hubs.

Disappointing earnings from US chip designers Qualcomm and Arm also weighed on sentiment, adding to questions about returns on heavy AI investment. The Philadelphia Semiconductor Index fell 3.1% Wednesday.

Other Asian markets advanced. Hong Kong’s Hang Seng gained 3.5% and Australia’s S&P/ASX 200 rose 2.4% during the session, while Japan’s broader Topix climbed 1.5%, highlighting the divergence between semiconductor shares and the wider market.

Oil extended Wednesday’s steep losses as investors weighed whether the election outcome could increase pressure for an end to the US-Iran conflict.

Brent crude futures rose 0.4% to $95 a barrel as of 0750GMT and US benchmark West Texas Intermediate declined 0.2% to $87.90, after both benchmarks plunged more than 8% Wednesday. Lower fuel costs helped lift airline shares, including Japan Airlines, Singapore Airlines and Cathay Pacific.

The broader market gains followed a strong Wall Street session Wednesday, when the Dow Jones Industrial Average rose about 3%, the S&P 500 gained 1.6% and the Nasdaq Composite advanced 1.4%. (AA)