The Overnight Report: DeepSeek Triggers Sell-Off

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SPI futures are suggesting Australia is not ready to join in on the global risk off move?

Good morning.

And just like that Tech and Growth are out of favour

That left field event to upset the relentless uptrend for Technology stocks and AI beneficiaries has arrived via a start-up firm in China.

DeepSeek has managed to establish a competitive role in the global AI development on cheaper computerchips, requiring less energy and less advanced hardware, and traders worldwide are grabbing the news to sell prior winners that could do no wrong.

But analysts have also been quick to respond, and the initial commentary seen thus far is that this might well end up being something akin to last year’s GLP-1 scare that pushed shares in ResMed ((RMD)) to near $20.

Last week, those same shares were staring at $40.

Technology analysts at Citi, for example, already expressed their confidence in the ongoing investment case for Megaport ((MP1)) early this morning.

None of the above will matter much today as falling share prices will simply elicit more selling and those ‘deep value’ investors who have been calling for (at least) a deep correction in the strong bull market for everything Techy finally have their field day.

DeepSeek’s app is reportedly already the most downloaded on the Apple platform.

Over in the US, shares in Nvidia have lost -US$589bn in market cap and this is reportedly the largest fall ever recorded in share market history.

That’s what you get when shares have been rising strongly, of course.

The emergence of the Chinese AI startup forms a challenge to established US players, triggering significant losses for US tech giants, with shares in Nvidia dropping -15% and Broadcom, Oracle, and Arista experiencing declines ranging from -12% to -18%.

The local market today will see follow-through for the likes of NextDC ((NXT)), Goodman Group ((GMG)), Macquarie Technology ((MAQ)), and others.

Changing subject, the sell-off in US leading Tech has opened up a general risk-off in investor sentiment, with negative impact for commodities markets.

Add economic data from China and US president Trump’s tariff threat on Colombia and general sentiment took a decisive dip into caution first, ask questions later.

WTI crude futures are down -2.39% with Brent slipping -1.92%.

As far as the calendar is concerned. short-term market direction will likely hinge on the upcoming Federal Reserve meeting this Wednesday.

Key economic data, including U.S. GDP growth figures and PCE inflation data, will also be closely watched.

In Australia, Q4 CPI will be released tomorrow.

On the calendar today:

-New Zealand Dec Employment Indicator

-Australia Dec NAB Business Survey

-China Public Holiday

-Eurozone ECB Lending Survey

-US Dec Durable Goods Orders

-US Jan Consumer Confidence

-US Nov House Prices

-AIC Mines ((A1M)) Quarterly update

-Opthea ((OPT)) investor briefing (US)

-Stanmore Resources ((SMR)) Quarterly update

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

Corporate news in Australia:

-Hedge funds are reportedly eyeing Southern Cross Media Group ((SXL))

-Blackstone may acquire The Star’s ((SGR)) Sydney slot machines if it fails, to enhance Crown Resorts’ NSW operations

The Australian share market over the past thirty days

For more detail go to FNArena’s Australian Broker Call Report, which is updated each morning, Mon-Fri.

All overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX and more available on the FNArena website.  Click here. (Subscribers can access prices on the website.)

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