Equities slide

- Advertisement -

TOKYO- US stock futures and Asian shares outside China slumped on Monday as investors weighed the implications of Chinese startup DeepSeek’s launch of a free, open-source artificial intelligence model to rival OpenAI’s ChatGPT.

Meanwhile, the dollar rose after US President Donald Trump slapped Colombia with retaliatory levies and sanctions for turning away military aircraft carrying deported migrants.

US Nasdaq Composite futures tumbled 1.8 percent and S&P 500 futures sank 0.9 percent.

- Advertisement -

Japan’s Nikkei dropped 0.3 percent, reversing an initial advance. New Zealand’s equity benchmark slipped 0.6 percent and Singapore’s Straits Times index lost 0.2 percent.

At the same time, Hong Kong’s Hang Seng rallied 0.9 percent and mainland blue chips added 0.2 percent, even after data showed a surprise contraction in manufacturing this month.

DeepSeek “has raised the specter of disruption in the tech landscape, with its emergence suggesting that China can continue to make strides in the AI race despite US restrictions,” Yeap Jun Rong, a strategist at IG, wrote in a note.

It “seems to instil some concerns over US tech dominance”, putting “tech companies’ lofty valuation back under scrutiny”, he said.

In currencies, the dollar jumped 0.3 percent against the Chinese yuan in offshore trading and rallied 0.4 percent versus the Aussie and 0.5 percent versus the New Zealand dollar with the antipodean currencies tending to act as more liquid proxies for China’s currency due to close trade ties.

The Mexican peso slumped 1 percent and the Canadian dollar eased 0.3 percent. The Colombian peso had yet to trade against the dollar, but had rallied 3.4 percent over the previous three sessions.

China, Mexico and Canada face a nervy wait with Trump last week earmarking Feb. 1 for additional tariffs on the United States’ top trading partners.

However, Nomura strategist Naka Matsuzawa expects dollar strength on tariff worries to be fleeting.

“As a trend, Trump is taking a more realistic, less aggressive stance on tariffs,” Matsuzawa said.

Author

- Advertisement -

Share post: