Asian markets fall after China’s DeepSeek spooks Wall Street; Japanese Nikkei lead losses

Asian markets traded lower on Tuesday following overnight losses on Wall Street amid sell-off in technology stocks. Concerns over the emergence of a low-cost Chinese generative AI model DeepSeek fuelled selling in tech stocks globally.

Japan’s Nikkei declined 1.3% to 39,045.81, while the broader Topix was up 0.36% at 2,768.43 after trading lower in early trade. Hong Kong’s Hang Seng index futures indicated a higher opening.

Chip-testing equipment maker Advantest, a supplier to Nvidia, declined 10% to drag the Nikkei the most. Chip-making equipment maker Tokyo Electron share price dropped 5.3%, while technology start-up investor SoftBank Group shares lost 6%.

The Japanese yen rose nearly 1% against the dollar to its strongest since mid-December amid the sell-off in US technology shares.

Meanwhile, Several Asian markets, including Taiwan, South Korean and Chinese markets, are closed for the Lunar New Year holiday.

Wall Street

Overnight on Wall Street, the Nasdaq posted its biggest one-day percentage drop since December 18 on Monday as a low-cost Chinese artificial intelligence model prompted a steep sell-off in US chipmakers.

The Dow Jones Industrial Average gained 289.33 points, or 0.65%, to 44,713.58, while the S&P 500 lost 88.96 points, or 1.46%, to 6,012.28. The Nasdaq Composite closed 612.47 points, or 3.07%, lower at 19,341.83.

Nvidia share price sank 17%, Microsoft shares declined 2.1% and Alphabet stock price plunged 4.2%, while Dell Technologies share price dropped 8.7%. Apple shares rallied 3.18%, while Vistra stock dropped 28.3%.

(With inputs from Reuters)