Asia equities slide with US stock futures on China’s AI push; dollar firms

Asian stock markets and U.S. futures fell on January 27 as investors reacted to the launch of DeepSeek, a Chinese startup’s rival to ChatGPT, raising concerns about U.S. tech dominance and the potential disruption in the AI sector. Despite strong performance in Hong Kong’s Hang Seng and China’s blue-chip stocks, broader Asian indices like Japan’s Nikkei and New Zealand’s equity benchmarks saw declines. These developments highlighted the market’s uncertainty around China’s technological advancements despite ongoing U.S. restrictions.

In currency markets, the dollar strengthened, particularly against the Chinese yuan, following U.S. President Trump’s threats of tariffs on Colombia over a deportation dispute. The dollar also gained ground against other major currencies, including the Mexican peso and Australian dollar, as traders reacted to the global trade tensions. The Mexican peso, in particular, slid, while the Colombian peso saw a surge after the tensions eased with a last-minute diplomatic deal.

Meanwhile, commodity markets experienced volatility, with crude oil prices falling after Trump called for OPEC to cut oil prices. Bitcoin also suffered a notable drop, slipping below $100,000. The week ahead holds significant events, including key meetings by the Federal Reserve and the European Central Bank, as markets anticipate more policy changes amidst the Lunar New Year holiday closures across several Asian markets.

Source: Reuters