Asian Stock Markets Exhibit Mixed Performance After Major Sell-off in U.S. Tech Sector

Asian stock markets displayed a mixed performance following a significant sell-off in the technology sector of the United States stock market, particularly Wall Street. This major drop was triggered by the rise of a Chinese artificial intelligence (AI) startup that has intensified competition in the global AI landscape.

On January 28, 2025, trading was somewhat quiet in anticipation of the Lunar New Year. The Nikkei 225 index in Japan fell by 0.9% to 39,214.19. Meanwhile, Australia’s S&P/ASX 200 index saw a slight increase of less than 0.1% reaching 8,411.70, and Hong Kong's Hang Seng index rose by 0.2% to 20,236.13. The markets in South Korea, Shanghai, and other regions were closed due to the holiday.

In Japan, various Asian stock markets in the technology sector experienced notable declines. SoftBank Group Corp. suffered a loss of 10%, while Hitachi Ltd fell by 4%. However, Fujitsu and Sony Corp reported recoveries. Additionally, shares of the chip manufacturer Tokyo Electron dropped by 7.6%.

Fuji Media Holdings saw its shares surge nearly 9% after an extensive press conference held by its executives, which lasted over 10 hours. Prior to this rise, Fuji’s stock had fluctuated amid reports of a scandal involving a female presenter and a male celebrity in Japan, leading to their resignations.

On the previous trading day, January 27, the S&P 500 index declined by 1.5% to 6,012.28, primarily due to a sharp drop of 16.9% in Nvidia shares. Other major tech stocks also faced losses, resulting in the Nasdaq index dropping by 3.1% to 19,341.83, marking the worst decline in over a month.

The losses were especially pronounced among stocks connected to artificial intelligence, although other markets tended to remain more stable. The Dow Jones Industrial Average actually rose by 0.7% to 44,713.58, with most American stocks being listed positively.

However, investors holding funds in the S&P 500 felt significant effects due to the dominance of large technology companies within that index.

A significant disruption also came from China, where an AI company named DeepSeek launched a large language model that can compete with U.S. technology firms at a lower cost. On January 27, 2025, DeepSeek achieved the top position on the free apps segment of Apple's App Store, which is impressive given the restrictions placed by the U.S. government on China’s access to advanced AI chips.

Nonetheless, the full impact of DeepSeek's announcement on the AI-dependent economy, particularly in Asian stock markets involving chip manufacturers and energy suppliers for high-computational data centers, remains unclear.

Asia, Stocks, AI