(Bloomberg) — Asian shares rose partly on optimism about artificial intelligence in China, shrugging off Donald Trump’s imposition of tariffs on Colombia that cut risk appetite elsewhere.
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Shares advanced in Japan, Hong Kong and mainland China, with Chinese tech firms linked to DeepSeek’s business model rallying after the AI startup gained traction.
In contrast, US stock index futures slid in Asia amid concerns that DeepSeek may disrupt US technological leadership. Meanwhile, the dollar edged higher while Treasuries also gained, reflecting caution after Trump ordered tariffs on Colombia for refusing to allow deported migrants to land in the country. The Mexican peso declined.
Trump’s latest decision threatens to derail last week’s global markets rebound after the US president avoided placing immediate import levies on goods from Mexico, Canada and China. That temporarily assuaged fears a global trade war would erupt in the first days of his new term in office.
“Eyes will be on how they will address this latest development from China,” said Jun Rong Yeap, a market strategist at IG Asia. “While it remains to be seen if DeepSeek will prove to be a viable, cheaper alternative in the long term, initial worries are centered on whether U.S. tech giants’ pricing power are being threatened.”
Elsewhere, China’s factory activity unexpectedly contracted in January as production wound down ahead of China’s Lunar New Year holiday. The official manufacturing purchasing managers’ index was 49.1, versus 50.1 in December, the National Bureau of Statistics said Monday.
Markets in Taiwan, South Korea, and Australia are closed for a holiday Monday.
In the corporate world, the start of the US tech earnings season is key to global equities. Investors are eager to see whether demand for artificial intelligence will live up to sky-high expectations.
Fed Rate Decision
Later this week, the US central bank is widely expected to hold interest rates steady at the end of its two-day meeting on Wednesday, marking the first pause in the rate-cutting cycle it kicked off in September.
The US economy remains strong with robust employment growth and the decline in inflation has slowed, “there is therefore no need to cut interest rates urgently,” ANZ Group Holdings Ltd. economists including Sharon Zollner wrote in a note to clients. “In addition, yet-to-be-confirmed US trade and tariff policy, federal government efficiency drives, re-focused energy policy and deregulation all hold implications for growth and inflation. This justifies FOMC caution.”
Source: Asian Stocks Gain as DeepSeek Fuels China AI Rally: Markets Wrap
