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The ASX200 slipped -0.1% on Tuesday, a solid performance considering the market turmoil created by DeepSeek’s dramatic emergence. The new Chinese AI player has challenged many people’s belief that the “Magnificent Seven” would dominate AI for years to come.
The ASX held up well today despite a savage sell off in the mega cap tech stocks over night in the U.S. The index traded in a tight range relative to other markets, down 30 points in the morning, bouncing to close flat; the resilience driven by a lack of exposure to tech as we saw some flight to safety in banks.
DeepSeek, a Chinese AI startup, has launched breakthrough AI models that offer comparable performance to the world’s best chatbots at a fraction of the cost. The Hangzhou-based company, which was only launched in 2023, created a free, open-source large-language model in late December, claiming it was developed in just two months at the cost of under $6 million.
The ASX200 ended the penultimate week of January up +1.2%; the market took its lead from US indices, with the tech and financial sectors both advancing over 3% while the energy and materials stocks surrendered some of their earlier monthly gains. Overall excitement toward Trump’s pro-business policies largely pushed risk assets higher this week as investors focused on his inauguration.
A decent session in Oz today with the retailers generally doing well pushing the consumer discretionary sector up more than 2% – a few stock specific influences at play. A positive week overall for markets, the final one with a partial holiday vibe, with those stragglers taking extended holidays back on deck post the Australia Day holiday on Monday.
The ASX200 fell 0.6% on Thursday as the influence of miners rather than tech weighed on the local bourse. The local market slipped for the first time since Donald Trump’s inauguration amid fears of what the US president’s promised tariffs might do for trade with China. Investors remain scared of Trump’s tariffs towards China, and despite a mention of a 10% cent tariff (only), it was enough to see buyers retreat on mass.
A solid session overnight in the U.S didn’t translate to the ASX today – the differentials in sector composition on full display. Resources were hit hard as lower commodity prices weighed, with the local bourse lacking a real tech sector to offset that weakness.
The ASX200 closed up +0.3% on Wednesday, extending January’s gain to +3.6%. Again, the market surrendered ~50% of its mid-morning rally, but a close less than 1% below its all-time high is encouraging for the bulls.
Another choppy session with the best of it seen early, the ASX hitting a 8455 high before tapering off in the afternoon session, though we still closed higher. Asian markets were softer despite Trump commenting about a 10% tariff on China, a far cry from the 60% suggested during the election, but that failed to have any impact on the Material sector, with a bunch of production updates the greater influence.
The ASX200 closed up +0.66% on Tuesday, but it was intra-day action that told the real story of Donald Trump’s first day of his second term as President of the US. Local stocks surged over 100 points into a late-morning high – “risk-on” played out across the bourse as the index surged toward striking distance of its all-time high.
