A day after China’s DeepSeek rattles Big Tech stocks, Asian markets open mixed on Jan 28

Markets in South Korea, Shanghai markets and other parts of the region were closed for holidays. Among technology companies in Japan, SoftBank Group Corp. stock extended its losses, plunging 6%. Hitachi Ltd. lost 7%, but Fujitsu and Sony Corp. recovered

TOKYO: Asian shares were mixed in thin Lunar New Year trading on Tuesday after Wall Street’s tech superstars tumbled as a competitor from China raised doubts over the recent artificial-intelligence market frenzy.

Japan’s benchmark Nikkei 225 lost 1.5% to 38,959.05. Australia’s S&P/ASX 200 was little changed, inching down 0.1% to 8,399.10. Hong Kong’s Hang Seng rose 0.1% to 20,225.11. Markets in South Korea, Shanghai markets and other parts of the region were closed for holidays. Among technology companies in Japan, SoftBank Group Corp. stock extended its losses, plunging 6%. Hitachi Ltd. lost 7%, but Fujitsu and Sony Corp. recovered.

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Computer chip maker Tokyo Electron sank 5.5%. Fuji Media Holdings, rocked by a sex scandal, rose 1% after a marathon news conference overnight by its top executives that lasted more than 10 hours, in which two of them resigned to take responsibility for the scandal.

Fuji’s stock price has zigzagged in recent months amid Japanese magazine reports about “a problem” involving an anchorwoman and a Japanese male star. He has subsequently announced his retirement.

On Monday, the S&P 500 dropped 1.5% to 6,012.28, dragged down in large part by a 16.9% fall for Nvidia. Other Big Tech stocks also took heavy losses, pulling the Nasdaq composite down 3.1% to 19,341.83 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 Industrial Average rose 0.7% to 44,713.58, and the majority of US stocks climbed. But anyone holding an S&P 500 index fund, which are found in many 401(k) accounts, felt the pain because of how influential those tech giants have become on indexes.

The shock to financial markets came from China, where an AI company called DeepSeek unveiled a large language model that can compete with US giants but at potentially a fraction of the cost.

DeepSeek had already hit the top of the chart for free apps on Apple’s App Store by Monday morning, and analysts said such a feat was particularly impressive given how the US government has restricted Chinese access to top AI chips.

It’s unclear, however, how much DeepSeek’s announcement will ultimately shake the economy that’s built around the AI industry, from the chip makers making semiconductors to the utilities hoping to electrify vast data centers 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 skeptics around this issue given the information is coming from China,” according to Dan Ives, an analyst with Wedbush Securities.