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EQUITIES: Asian Equities Fall On DeepSeek Fears

EQUITIES
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Asian shares declined amid concerns over inflated valuations in the AI sector following the rise of DeepSeek, a Chinese AI startup offering cheaper alternatives. The MSCI Asia Pacific Index fell 0.6%, with Japan’s tech stocks among the hardest hit. The dollar strengthened after President Trump advocated for steep universal tariffs and announced plans for levies on foreign semiconductors, metals, and pharmaceuticals. Meanwhile, Chinese markets were closed for the Lunar New Year holidays, leaving traders to assess slowing economic momentum. Indian small-cap stocks extended their bear market losses, while Japan’s semiconductor and AI-adjacent companies saw significant declines.

  • Japanese semiconductor and AI-related stocks slumped, led by Advantest (-18% over two days), SoftBank (-6.7%), and Tokyo Electron. The DeepSeek AI model raised fears of falling semiconductor demand and AI infrastructure investments, which also dragged power generation stocks lower. The TOPIX is now trading unchanged, while Nikkei is -1.25% lower.
  • Chinese markets were closed for the Lunar New Year, but investors are concerned about a slowdown in economic recovery despite recent stimulus. Developers like China Vanke saw some gains in Hong Kong after government support was pledged, but broader market sentiment remains cautious. The HStech Index is 0.75% higher, while the HSI is trading 0.15% higher.
  • Indian small-cap stocks entered a bear market, with the NSE Nifty Smallcap 250 Index dropping over 20% from its peak amid concerns over economic and earnings slowdowns. Foreign funds have been pulling out, compounding losses in recent months.
  • DeepSeek’s rise sparked a selloff in US tech stocks, with Nvidia losing $589b in market value overnight, the largest single-stock wipeout ever. Investors are closely watching major tech earnings this week to restore confidence in the AI sector as profit growth expectations weaken.
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Asian shares declined amid concerns over inflated valuations in the AI sector following the rise of DeepSeek, a Chinese AI startup offering cheaper alternatives. The MSCI Asia Pacific Index fell 0.6%, with Japan’s tech stocks among the hardest hit. The dollar strengthened after President Trump advocated for steep universal tariffs and announced plans for levies on foreign semiconductors, metals, and pharmaceuticals. Meanwhile, Chinese markets were closed for the Lunar New Year holidays, leaving traders to assess slowing economic momentum. Indian small-cap stocks extended their bear market losses, while Japan’s semiconductor and AI-adjacent companies saw significant declines.

  • Japanese semiconductor and AI-related stocks slumped, led by Advantest (-18% over two days), SoftBank (-6.7%), and Tokyo Electron. The DeepSeek AI model raised fears of falling semiconductor demand and AI infrastructure investments, which also dragged power generation stocks lower. The TOPIX is now trading unchanged, while Nikkei is -1.25% lower.
  • Chinese markets were closed for the Lunar New Year, but investors are concerned about a slowdown in economic recovery despite recent stimulus. Developers like China Vanke saw some gains in Hong Kong after government support was pledged, but broader market sentiment remains cautious. The HStech Index is 0.75% higher, while the HSI is trading 0.15% higher.
  • Indian small-cap stocks entered a bear market, with the NSE Nifty Smallcap 250 Index dropping over 20% from its peak amid concerns over economic and earnings slowdowns. Foreign funds have been pulling out, compounding losses in recent months.
  • DeepSeek’s rise sparked a selloff in US tech stocks, with Nvidia losing $589b in market value overnight, the largest single-stock wipeout ever. Investors are closely watching major tech earnings this week to restore confidence in the AI sector as profit growth expectations weaken.