“World stock market capitalization evaporates 4,800 trillion won in one day due to ‘blue wave shock’”

It was analyzed that the global market capitalization evaporated $3.5 trillion (approximately KRW 4773 trillion) in one day due to the selling of artificial intelligence (AI)-related stocks that occurred as the Democratic Party gained local power in the Senate and House of Representatives in the U.S. midterm elections.

According to the Nihon Keizai Shimbun (Nikkei) analysis of data from global financial data analysis platforms Quick and FactSet on the 7th, the market capitalization of stocks around the world as of the 5th totaled $154 trillion (about 21.25 trillion won), a $3.5 trillion decrease from the previous day.

In addition, on the 6th, the market capitalization of 77 trillion yen (approximately 663 trillion won) disappeared from the Tokyo Stock Exchange prime market, further increasing the scale of market capitalization due to the so-called 'blue wave' shock caused by the prospect that the US Democratic Party will regulate the AI ​​industry.

The three major stock indices of the New York Stock Exchange in the United States plummeted on the 5th (local time), led by AI-related technology stocks, and the market capitalization of Nasdaq index constituent stocks decreased by approximately $2.5 trillion (approximately 3400 trillion won). This is the largest single-day decline ever.

However, the New York stock market rebounded on the 6th (local time) due to the influx of low-price buying following the sharp drop the previous day.

Stock markets in the Greater China region, including Taiwan, also plummeted on the 6th, and the Jiquan Index fell 3,736.67 (-8.99%) immediately after opening. It was the largest intraday drop in Taiwan's stock market history.

The stock price of TSMC, the world's largest foundry (semiconductor consignment production) company that ranks first in market capitalization in Taiwan, fell for 7 consecutive trading days, falling to 9.82%, close to the lower limit, immediately after opening.

Samsung Electronics and SK Hynix, two major stocks in the Korean stock market, plummeted on the 6th, causing the overall KOSPI market capitalization to decline by more than 3 trillion won from its highest level.

Since the U.S. OpenAI's ChatGPT, which brought about the AI ​​development boom, was released in November 2022, the global market capitalization has increased 1.6 times, but due to concerns about the U.S. Democratic Party's strengthening of data center regulations, a cold wind is blowing against investment in AI-related stocks such as semiconductors around the world.

Takayuki Ishibashi, vice president of Goldman Sachs Securities, said, "It is difficult to expect material that will cause stock prices to rapidly rebound like in past market downturns, so there is virtually an atmosphere of resignation among investors."

Another Japanese asset management industry official predicted, “As stock prices have been purchased in a kind of enthusiastic atmosphere, there is a high possibility that the selling will be strong when it begins.”