Morning Wrap (28.01.2025)

Asian stocks traded lower Tuesday, with Japan's Nikkei 225 falling 1.5% as chipmakers slumped on concerns over China's DeepSeek AI model. Chinese and South Korean markets remained closed for Lunar New Year, while Hong Kong edged up 0.3% in shortened trading.

DeepSeek R1 AI model sparked a global tech selloff after demonstrating ChatGPT-level performance using older hardware and lower costs. Nvidia saw its biggest-ever single-day loss, wiping out nearly $600 billion in market value. OpenAI's Sam Altman called the model "impressive" but maintained that more computing power remains crucial.

Japanese chipmaking stocks led losses with Advantest plunging 10%, while Tokyo Electron and Renesas fell 2-4%. SoftBank Group dropped 4.7%. Hong Kong-listed Chinese tech firms bucked the trend, rising 1-5% on optimism over domestic AI capabilities.

Thailand's car production fell 17.37% year-over-year in December to 104,878 units, marking the 17th consecutive month of contraction amid weak domestic sales and exports.

Trump administration prepares aggressive trade measures, with plans to impose up to 100% tariffs on foreign-made computer chips, particularly targeting Taiwan's TSMC. Additional tariffs planned on pharmaceuticals and steel to encourage domestic production. Canadian imports face potential Feb 1 deadline.

Dollar strengthened against major currencies on tariff concerns, with EUR/USD down 0.54% to 1.0441. USD/JPY rose 0.84% to 155.57. Markets await Federal Reserve meeting conclusion Wednesday and ECB decision later this week, with ECB expected to cut rates.

Oil prices stabilized with Brent at $76,54 and WTI at $73.51 after steep losses last week. Trump's national energy emergency declaration and calls for increased OPEC production weighed on sentiment, while Chinese economic concerns and DeepSeek's efficiency claims raised demand questions.

SAP raised its 2025 outlook, forecasting operating profit of €10.3-10.6 billion on accelerating cloud revenue growth. The company expects 26-28% cloud revenue growth to €21.6-21.9 billion, supported by strong ERP and RISE adoption.

Bank of Japan board nominee Junko Koeda, a Waseda University professor specializing in macroeconomics, previously supported the BOJ's exit from negative rates. 

Arizona advances bill allowing state investment in Bitcoin and establishing potential strategic crypto reserve. Bitcoin gains 1.3% to $102,820 with Ethereum up 1.15% to $3200.