Asian stocks fall on Democratic midterm gains, AI regulation fears

South Korean and Taiwanese stocks tumbled Wednesday after US midterm election projections indicated significant Democratic gains, raising investor concerns about tighter AI regulations and slower data centre investment. Chipmakers led the regional sell-off. South Korea's KOSPI dropped 4%, while Taiwan's benchmark index fell over 3% to its lowest level since late July. SK Hynix declined 6.1%, Samsung Electronics fell 4.1%, and TSMC lost 2.2%. MSCI's emerging markets index slipped 1.8%. Asian currencies strengthened against a weaker dollar, with the South Korean won rising 0.5%. US equity futures also fell sharply, while Treasury yields declined as investors sought safe-haven assets amid election uncertainty.