London (AFP) - Stock markets diverged Thursday as traders weighed President Donald Trump’s hefty defeat in the US midterm elections against lingering concerns about huge AI investments.

Frankfurt’s DAX index hit a record high and London headed close to a new all-time peak after the Democrats’ stunning victory over Trump’s Republicans spurred investor optimism.

But tech-heavy Asian stock markets slid overall, with Seoul, the poster child of the AI-led surge in the first half of 2026, shedding more than five percent.

Oil prices steadied after plunging as much as 10 percent on Wednesday on hopes of progress towards ending the US-Iran war in case of increased Democratic pressure for a diplomatic solution.

“A release valve has been unscrewed following the Democratic success of the midterms, with pent-up concerns about an escalation of the war in the Middle East evaporating,” said Susannah Streeter, chief investment strategist at Wealth Club.

“But sentiment around the AI trade remains fragile, with an expected slowdown in the data centre build-out still acting like a drag on the big tech sector players,” she said.

Streeter added that “a similar picture looks set to play out on Wall Street” with the S&P expected to build on Wednesday’s rally but with tech coming under pressure on the Nasdaq.

In Britain, the pound was little changed ahead of a Bank of England meeting where policymakers are expected to raise the benchmark interest rate for the first time in more than three years as inflation remains elevated.

Away from AI and Trump, shares in Air France-KLM climbed over 12 percent after the carrier surprised investors with higher operating profit in the third quarter despite a soaring jet fuel bill.

Rheinmetall plunged nearly 16 percent as the German defence giant cut its earnings outlook for a second time in several months after Berlin pulled the plug on a major warship contract.

- Key figures at around 1030 GMT -

London - FTSE 100: UP 0.6 percent at 10,890.18 points

Paris - CAC 40: UP 0.5 percent at 8,221.17

Frankfurt - DAX: UP 0.5 percent at 26,567.26

Tokyo - Nikkei 225: DOWN 1.8 percent at 61,077.90 (close)

Hong Kong - Hang Seng Index: UP 3.7 percent at 24,796.98 (close)

Shanghai - Composite: UP 0.1 percent at 3,689.91 (close)

New York - Dow: UP 3.0 percent at 53,356.12 (close)

Brent North Sea crude: UP 1.7 percent at $96.22 per barrel

West Texas Intermediate: UP 0.6 percent at $88.64 per barrel

Euro/dollar: UP at $1.1235 from $1.1229 on Wednesday

Pound/dollar: DOWN at $1.3465 from $1.3473

Dollar/yen: DOWN at 158.34 yen from 158.49 yen

Euro/pound: UP at 83.46 pence from 83.35 pence

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