Financial

Markets rebound after tech rout triggered by Democrats’ sweeping victory in US midterm elections.

Asian stock markets have rebounded after last week’s tech rout triggered by the Democratic Party’s sweeping victory in the US midterm elections.

Key indexes in Japan, South Korea, Taiwan and Hong Kong made substantial gains on Monday, following a rebound on Wall Street on Friday.

In Tokyo, the benchmark Nikkei 225 was up 3.45 percent as of 04:00 GMT.

In Taipei, the Taiex was 5.72 percent higher, while the Kospi in Seoul was up 1.68 percent.

Hong Kong’s Hang Seng Index was up 0.19 percent.

Futures for Wall Street’s benchmark S&P 500 index and the tech-heavy Nasdaq 100 were up 0.60 percent and 0.59 percent, respectively.

They had dipped earlier following US-based chip giant Nvidia’s announcement that it would investigate its CEO over a romantic relationship he conducted with a woman accused of being a Chinese spy.

Nvidia’s board of directors said that while it had confidence in CEO Jensen Huang and had no reason to believe that national security or company secrets were compromised, an independent inquiry would examine “all available information”.

The board said Huang supported the inquiry and pledged his full cooperation.

“The Board prioritizes U.S. national and economic security, which is paramount to the interests of NVIDIA and its shareholders,” the company said.

The stock market rebound comes after the US midterm results prompted a $2.5 trillion sell-off on Wall Street on Thursday amid concerns that Democratic-controlled legislatures could slow the rollout of data centres used to power AI.

The tech rout spilled into Asia 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.

Political turmoil comes after a digital bank’s failure has left half the population without access to their accounts.

Lawmakers in Paraguay have resumed impeachment proceedings against President Santiago Pena, a day after he resigned amid links to the country’s worst financial crisis in decades.

The Senate convened a rare session on Friday to consider Pena’s political future, opting to move forward with efforts to remove the conservative economist from office.

Politicians formally filed impeachment charges against the president on Thursday, despite his resignation. Pena, who was elected in 2023, has requested a 72-hour extension to prepare his defence before the Senate.

The proceedings follow a vote in Paraguay’s lower house of Congress, where lawmakers overwhelmingly approved impeachment charges against Pena in a 78-0 vote.

The political turmoil surrounding the country’s president follows Paraguay’s central bank’s intervention earlier this week at Ueno Bank, one of the country’s fastest-growing digital lenders, citing breaches of minimum solvency requirements.

Pena previously held a stake in Ueno’s parent company, Grupo Vazquez, until last year, when he claims he sold his shares. Paraguayan lawmakers have accused the president of a conflict of interest and questioned whether authorities failed to act on warnings about the lender’s financial position.

The collapse of Ueno, which held $850m in public funds, has left more than half of Paraguay’s population without access to their accounts, drawing intense scrutiny over the government’s relationship with the bank and financial regulators’ effectiveness.

“My greatest wish is that the return of those funds be guaranteed, that the deposit guarantee fund fulfil its purpose, and that public funds — as well as the resources that belong to all Paraguayans — be protected,” Pena said in a Thursday video address where he apologised for failing to prevent the crisis.

The crisis has also prompted the resignation of Paraguay’s central bank chief, Carlos Carvallo, and arrest warrants for eight Ueno executives, who later turned themselves in.

Paraguay’s attorney general has ordered three criminal investigations into the bank’s collapse, including its regulatory oversight and the placement of public funds in the institution.

If Pena is convicted in an impeachment trial, he would lose the lifetime Senate seat and associated legal protections ordinarily granted to former Paraguayan presidents.

LIV Golf has provided one of the most tumultuous episodes in the history of golf since its launch in 2021, one which threatened to tear the sport apart.

High-profile players joined and were banned from other tours, as well as events such as the Ryder Cup.

More than $5bn (£3.7bn) was spent by PIF, with major winners including Rahm and Bryson DeChambeau lured by lucrative contracts and vast prize money.

But the future of the concept – and its star players – has been shrouded in uncertainty this year after the 2026 season ended early. An event in August in Indianapolis proved to be the last.

When PIF announced it was withdrawing its funding in April, LIV announced a “strategic evolution” – including a newly established independent board – and attempted to find replacement financial investors.

The exodus of players continued, however, including the exits of Rahm, Ian Poulter, Tyrrell Hatton and Graeme McDowell. When Rahm left it was reported he was owed about $100m (£75m) from the remainder of the contract.

The European tour, which is sponsored by DP World, had also increased pressure on players when it announced last month that those who signed up to LIV Golf next season would not be allowed to be members of the European tour in 2027.

That would have also spelled an end to any players with ambitions of featuring in the Ryder Cup as only DP World Tour members can play for Europe in the biennial team competition.

Speaking this week, Lee Westwood, one of the most high-profile players to join LIV when it first began in 2022, said the proposed revamp still had potential to thrive but added “there hasn’t been anything presented to me that is agreeable for LIV 2.0”.

DeChambeau, who had not revealed his future plans, said he hopes the league “exists forever”, while former Taylor Made and Adidas executive Mark King was appointed as a senior adviser last week.

A loose deadline for LIV to confirm its players for 2027 had been set for last Sunday – a point which, having now passed, appears to be drawing the saga to an end.

Global stock markets have climbed as investors continue to bet on bright prospects for the tech giants driving the AI boom.

In the United States, all three major stock indexes rose on Tuesday, led by the tech-heavy Nasdaq Composite, which gained 1.18 percent.

The benchmark S&P 500 rose 0.6 percent, while the narrower Dow Jones Industrial Average edged up 0.03 percent.

Five of the “Magnificent Seven” tech stocks rose, led by Tesla, up 4.04 percent.

Amazon gained 1.61 percent, while Apple and Alphabet gained 0.93 percent and 0.9 percent, respectively.

Nvidia, the world’s most valuable public company, rose almost 1 percent after announcing a $3bn investment in Meta’s equity offering.

Meta fell 1.64 percent, while Microsoft fell 0.24 percent.

Other big movers in tech included Advanced Micro Devices, Broadcom and Intel, which gained 5.45 percent, 4 percent and 3.61 percent, respectively.

Asia Pacific markets rally

Gains continued in the Asia Pacific on Wednesday, with stock markets in Japan, South Korea, Taiwan and Australia climbing.

The KOSPI in Seoul led the gains, with the benchmark index up 5.84 percent as of 03:00 GMT.

The surge came as South Korea’s SK Hynix, one of the world’s top three memory chip makers, announced blockbuster third-quarter results on Wednesday, with operating profit soaring about 630 percent year-on-year to 83.33 trillion won ($62.8bn).

SK Hynix shares listed in South Korea surged more than 8 percent following the results.

In Tokyo, the benchmark Nikkei 225 was up 1.26 percent, while the TAIEX in Taipei was up 1.32 percent.

The S&P/ASX 200 in Sydney was up 0.11 percent.

Investors are keenly anticipating upcoming earnings reports from major tech players as they try to gauge whether their massive investments in AI will pay dividends.

Microsoft and Alphabet report their latest results on Wednesday, followed by Amazon on Thursday and Apple on Monday.

On Monday, AI giant Anthropic filed paperwork for its hotly anticipated IPO, reporting a net loss of $80.7bn in the first half of 2026 on $16.3bn in revenue.

Tech firms have poured hundreds of billions of dollars each into AI infrastructure, fuelling debate over whether a speculative market bubble could be forming similar to the one that preceded the 2000 dot-com crash.

Global AI investment is forecast to hit $2.7 trillion in 2026 and $3.6 trillion in 2027, according to Gartner, a technology insights company.

Oil prices, which have been elevated since the start of the US-Israel war on Iran, rose about 1 percent as Asian markets opened on Wednesday amid the ongoing conflict in the Middle East, including hostilities between Saudi Arabia and Yemen’s Iran-aligned Houthis.

Futures for Brent crude, the global benchmark, stood at about $115 a barrel, up 59 percent from before the war began.

Investors react to Lula’s election victory with a sharp decline in the Brazilian real and concerns over increased spending and fiscal challenges.

Brazil’s real dropped against the United States dollar on the heels of Brazil’s President Luiz Inacio Lula da Silva’s unexpected re-election after right-wing Flavio Bolsonaro, the son of former President Jair Bolsonaro, led in the first round of voting earlier this month.

Brazil’s currency dropped against the dollar by 12 percent in spot trading. Bovespa stock index futures tumbled nearly 15 percent on Monday.

“I’m not surprised the real is sinking sharply; traders are covering their bets that assume a Bolsonaro victory and tighter fiscal policy,” Rachel Ziemba, adjunct senior fellow at the Center for a New American Security, told Al Jazeera.

Brazil’s stock exchange halted trading for 30 minutes. The Bovespa index fell 10 percent from its previous close, triggering a circuit-breaker safety mechanism and reversing a rally earlier this month amid expectations of a shift to the right after Bolsonaro won the first round.

Ziemba says Bolsonaro’s refusal to concede the election has driven some financial uncertainty.

“The market pressure is also amplified by the objections raised by Bolsonaro, but the scale of the victory suggests that the result will stand,” she said.

Interest rate futures had also reflected expectations that tighter fiscal policy under Bolsonaro would allow borrowing costs to decline.

“They [investors] assume more domestic spending and higher rates in Brazil. However, the real is still likely to be supported by strong commodity revenues,” Ziemba noted.

Stocks closed on Friday almost 7 percent above their level before the first round, while the Brazilian real was nearly 5 percent stronger against the US dollar.

Interest rate futures are up 3.1 percent, rising sharply after President Lula’s win. Interest rate futures had previously reflected a tighter fiscal policy amid expectations that Bolsonaro would oust the incumbent and that he would allow borrowing costs to decline.

Lula faces an increase in Brazil’s debt and will be challenged with protecting both social programmes and investment, with investors looking for signs of whether his gradual fiscal approach can bring borrowing costs down.

Lula’s team aims to produce a budget surplus of about 1.3 percent of gross domestic product (GDP) by 2030. That would leave money to cover part of the interest bill, reducing the need for fresh borrowing. But public debt already exceeds 82 percent of GDP, while pensions and other legally required spending limit where savings can come from.

“Lula’s policies have talked about spending cuts, but he has not gone into the details of how that is going to look,” said Divya Singaravelu, head of research at Meridian 1305 Capital.

Attention will now turn to Lula’s choice of finance minister and what it signals about his fiscal approach.

Morgan Stanley recommends sticking with quality stocks, expanding into higher-quality cyclicals such as capital goods, favoring equal-weight S&P 500 or S&P 600 indices over the lower-quality Russell 2000, and monitoring financials and bond volatility for market stability signals.