Decline in Most Asian Stocks Amid Wall Street Pressure

Asian markets witnessed a significant decline, influenced by a turbulent session on Wall Street and investor concerns about the valuation of artificial intelligence (AI) companies.

Contents

Technology Pressures
Markets
Earnings

Technology Pressures

The Impact of DeepSeek AI and Billion-Dollar Losses for Tech Companies

Asian markets saw a significant decline following a turbulent Wall Street session,
amid growing concerns about potentially inflated valuations of AI companies.
The MSCI Asia-Pacific Index dropped by 0.6%, weighed down by declines in major Japanese tech companies.

AI-Driven Declines

U.S. stock indices, such as the S&P 500 and Nasdaq 100,
also declined after the Chinese startup DeepSeek introduced a low-cost AI model.
This innovation raised questions about the justification of high valuations for AI companies.
Meanwhile, Asian markets like China and South Korea remained closed due to the Lunar New Year holiday.

Japanese tech stocks faced significant pressure; Advantest shares fell by 11%,
while SoftBank Group shares dropped by 6%.
However, Hong Kong’s Hang Seng Index opened higher, reflecting relative stability in some markets.

Markets

Market Trends and Future Bets

Some experts believe that DeepSeek’s application is not revolutionary but serves as a signal to reevaluate investments in AI stocks.
Billy Leung, an investment strategist at Global X ETF, stated: “This event calls for rebalancing the tech sector rather than a market crash.”

While Nvidia, a prominent symbol of AI boom, saw its stock drop by 17%,
leading to a loss of $589 billion, other companies, such as China Funk,
continued to gain thanks to strong government support.

Additional Pressure on China’s Economy

As the Lunar New Year holiday begins, investors in China face significant challenges due to an unexpected economic slowdown.
This has halted the momentum gained from previous economic stimulus measures,
prompting analysts to anticipate further interventions from Beijing to maintain stability.

Earnings

Global Anticipation for Big Tech Results

Investors worldwide are eagerly awaiting the earnings results of major tech companies like
Microsoft and Apple to regain confidence in the tech sector.
This cycle is expected to witness the slowest growth pace in nearly two years,
adding to the challenges faced by the sector’s high valuations.

DeepSeek’s Role in Market Disruption

Founded in 2023, DeepSeek specializes in developing open-source AI models, enabling developers to enhance their technologies.
Its application is distinguished by its ability to provide logic-based answers, making it a top download on Apple’s App Store.
The company aims to empower developers to use this technology to create new applications, thereby expanding its market influence.

Decline in Most Asian Stocks Amid Wall Street Pressure

Decline in Most Asian Stocks Amid Wall Street Pressure

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