Technology stocks led gains in Asia-Pacific markets yesterday, tracking advances on Wall Street as investor angst ebbed over the emergence of a low-cost Chinese artificial intelligence (AI) model that some see rivaling US dominance of the industry.
The US dollar remained relatively firm as traders rotated back into the currency from safe-haven peers such as the Japanese yen, while also getting a boost from fresh tariff warnings from US President Donald Trump’s administration.
Trading was thinned in Asia as the Lunar New Year holiday shuttered exchanges in mainland China and Hong Kong, as well as Taiwan, Singapore and South Korea.
Photo: Bloomberg
Japan’s Nikkei 225 index advanced 1 percent on the day, snapping three straight days of declines.
Australia’s S&P/ASX 200 added 0.6 percent, with a subindex of tech names climbing 1.8 percent, and India’s SENSEX was up 0.7 percent, while the SET in Bangkok shed 0.2 percent.
On Tuesday, the S&P 500 climbed 0.9 percent, clawing back more than half of its earlier drop. The Dow Jones Industrial Average added 0.3 percent and the tech-heavy NASDAQ Composite rallied 2 percent after sliding 3.1 percent the day before as the panic over Chinese AI company DeepSeek (深度求索) faded.
Nvidia Corp, whose chips are powering much of the move into AI and whose stock has become a symbol of the surrounding frenzy, rose 8.8 percent after plunging nearly 17 percent on Monday.
Other AI-related companies also held steadier, including chip company Broadcom Inc, which rose 2.6 percent. Constellation Energy Corp picked up 1.4 percent after plummeting nearly 21 percent on Monday. It had earlier rallied on expectations it would help supply the electricity that vast AI data centers would gobble up.
“There appeared to be a level of relief in the rally, mostly because of a forming consensus that while ostensibly impressive, DeepSeek will either lack the scalability to truly disrupt the AI space and, if anything, the company’s low-cost model will actually increase demand for GPUs,” Capital.com senior financial market analyst Kyle Rodda said.
Attention turned to mega-cap tech company earnings coming up on Wall Street later yesterday from Facebook owner Meta Platforms Inc, Microsoft Corp and Tesla Inc.
The US Federal Reserve was also to announce a policy decision later in the day, although it is widely expected to keep interest rates unchanged. If that proves true, it would be the first meeting where the Fed did not cut rates to give the economy a boost since it began doing so in September last year.
In foreign exchange markets yesterday, the US dollar index, which measures the currency against six major rivals, was flat at 107.91 following two days of consecutive 0.2 percent advances. The yuan added 0.2 percent in offshore trading to stand at 7.2597 per US dollar and the euro ticked up to US$1.0442.
The yen strengthened 0.2 percent to 155.24 per US dollar, garnering some support from minutes of the Bank of Japan’s December policy meeting, which signaled the intent of the board to continue with monetary tightening.
Additional reporting by AP
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