Asian stocks traded cautiously on Tuesday, with Japan’s Nikkei 225 leading losses, dropping nearly 1% as concerns over the Chinese AI model DeepSeek weighed heavily on chipmaking stocks like Advantest (-10%), Tokyo Electron (-2% to -4%), and SoftBank Group (-4.7%). DeepSeek’s cost-efficient AI model, which rivals high-performance counterparts like ChatGPT, raised doubts about the demand for advanced AI chips, triggering a global selloff in the sector.
Meanwhile, Hong Kong’s Hang Seng index rose 0.2% in light holiday trading, driven by gains in Chinese tech giants such as Tencent, Baidu, and Alibaba, reflecting optimism over China’s AI potential.
In Australia, the ASX 200 remained flat as investors awaited critical inflation data, which could influence the Reserve Bank of Australia’s rate decisions. Broader regional activity was subdued due to Lunar New Year holidays in China and South Korea, while U.S. futures steadied following heavy losses in tech stocks on Wall Street. Markets also focused on upcoming U.S. tech earnings and a Federal Reserve meeting set to maintain steady interest rates.
