Meanwhile, energy stocks weakened after oil prices sunk by 2 per cent on Monday as US President Donald Trump threatened to introduce a wide-ranging set of tariffs on imports, including potentially on some key industrial commodities such as steel, aluminium and copper.
Uranium producers Deep Yellow and Paladin Energy posted the biggest losses in early trading, slipping 16.4 per cent and 12.3 per cent, respectively.
In the mining sector, Fortescue added 0.5 per cent after news that the mining giant has entered a deal with buy Red Hawk Mining to gain access to an undeveloped iron ore mine near its major Solomon project in Western Australia. The offer price of as much as $1.20 cash per share implies a fully diluted equity value for Red Hawk of $254 million, Fortescue said on Tuesday. Red Haw’s share price soared more than 45 per cent to the offer price.
Lithium miners Pilbara lost 1.5 per cent as investors await a quarterly update late on Tuesday afternoon. BHP was up 0.8 per cent, while Rio Tinto added 0.1 per cent.
All four big banks were in the green, as CBA – the biggest stock on the ASX – lifted 0.8 per cent, while Westpac, ANZ and NAB all rose about 1 per cent, respectively. This comes after CBA announced on Friday it had sold its remaining 5.45 per cent stake in Chinese lender Bank of Hangzhou for about $940 million, after it sold a larger stake in the bank in 2022.
Consumer discretionary was the best performing sector in early trade, buoyed by gains from gambling machine manufacturer Aristocrat Leisure (up 2.5 per cent), white goods and furniture retailer Harvey Norman (up 1 per cent) and rag trade king Solly Lew’s Premier Investments (up 1.3 per cent).
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On Wall Street, the S&P 500 dropped 1.5 per cent overnight, dragged down in large part by a 16.9 per cent fall for Nvidia. Other Big Tech stocks also took heavy losses, and they pulled the Nasdaq composite down 3.1 per cent for its worst loss in more than a month.
The damage was focused on AI-related stocks, while the rest of the market held up much better. The Dow Jones rose 289 points, or 0.7 per cent, and the majority of US stocks climbed. But anyone holding an S&P 500 index fund, which are found in many pension savings, felt the pain because of how influential those tech giants have become on indexes.
DeepSeek had already hit the top of the chart for free apps on Apple’s App Store by Monday morning. Scepticism, though, remains about how much DeepSeek’s announcement will ultimately shake the economy that’s built around the AI industry, from the chipmakers making semiconductors to the utilities hoping to electrify vast data centres gobbling up computing power.
“It remains to be seen if DeepSeek found a way to work around these chip restrictions rules and what chips they ultimately used as there will be many sceptics around this issue given the information is coming from China,” said Dan Ives, an analyst with Wedbush Securities.
DeepSeek’s disruption nevertheless rocked AI-related stocks worldwide.
The rise of DeepSeek has sent Nvidia and other tech stocks tumbling. Credit: Bloomberg
Dutch chipmaking equipment company ASML slid 7 per cent. Japan’s Softbank Group lost 8.3 per cent.
All the worries sent investors toward bonds as safe havens. The rush pushed the yield of the 10-year Treasury down to 4.52 per cent from 4.62 per cent late on Friday.
It’s a sharp turnaround for the AI winners, which had soared in recent years on hopes that all the investment pouring in would remake the global economy and deliver gargantuan profits along the way. Such stellar performances also raised criticism that their stock prices had gone too far, too fast.
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Brian Jacobsen, chief economist at Annex Wealth Management, suggested not overreacting to Monday’s sharp swings.
“It is possible that the news out of China could be overstated and then we could see a reversal of the recent market moves,” he said.
AP
