Global shares have presented a mixed picture in the relatively quiet trading on Tuesday, with Wall Street's tech giants taking a hit as rivalling AI hype from China cast doubts over the recent artificial-intelligence market frenzy.
France's CAC 40 dipped slightly by 0.2% in early trades to reach 7,894.05, whereas Germany's DAX nudged up by 0.3% hitting 6,047.75. The FTSE 100 enjoyed a modest rise of 0.2%, elevating to 8,522.94. Stateside, investors are bracing for varied openings with Dow futures dropping 0.2% to 44,803.00, and S&P 500 futures hovering barely above water at 6,047.75.
Japan's key benchmark, the Nikkei 225, shed 1.4% closing at 39,016.87, while Australia's S&P/ASX 200 saw little movement, edging down just 0.1% to 8,399.10. Hong Kong's Hang Seng, however, managed to climb by 0.1% to 20,225.11.
Meanwhile, celebrations meant that markets in South Korea, Shanghai, and other parts of Asia remained shut. The technology sector in Japan faced some notable movements, with SoftBank Group Corp. plunging another 5%. Hitachi Ltd. took a significant blow, losing 6%, although Fujitsu and Sony Corp. managed to regain lost ground.
Semiconductor heavyweight Tokyo Electron took a dive of 5.7%. Fuji Media Holdings, saw its shares lift by 3%. The financial markets were taken aback by news from China, where an AI firm named DeepSeek revealed a large language model that could rival US behemoths but potentially at a fraction of the price.
The impact of DeepSeek’s announcement on the economy built around the AI industry, ranging from semiconductor manufacturers to utilities aiming to power vast data centres consuming computing power, remains uncertain.
This marks a significant shift for the AI victors, whose stocks had skyrocketed in recent years due to optimism that the influx of investment would transform the global economy and yield massive profits. Such impressive performances also sparked criticism that their stock prices had escalated too rapidly.
A small group of seven such companies, including Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla, have become so dominant that they alone contributed to more than half of the S&P 500’s total return last year, as per S&P Dow Jones Indices. Their enormous sizes grant them considerable influence over the S&P 500 and other indices that favour larger companies.
The markets are also anticipating earnings reports later this week from Apple, Meta Platforms, Microsoft and Tesla. In energy trading, benchmark US crude increased by 63 cents to $73.80 a barrel, while Brent crude, the international standard, rose by 73 cents to $77.81 a barrel.
In currency trading, the US dollar climbed to 155.66 Japanese yen from 154.51 yen, and the euro was valued at $1.0431, down from $1.0493.
