Asian Markets Cool As AI Enthusiasm Declines

Investor excitement over AI and chip stocks dwindled, causing both China and Hong Kong markets to decline. Trump's recent tariff imposition further impacted semiconductor shares. AI stocks dipped slightly, following gains from startups like DeepSeek. The conversation between Trump and Xi may affect future trade tariffs.

Investor enthusiasm for artificial intelligence and chip stocks waned on Tuesday, leading to a decline in China and Hong Kong markets. This marked the end of a three-session rally, as traders also considered the implications of U.S. President Donald Trump's latest tariffs.

China’s major indices saw a downturn, with the CSI 300 Index closing 0.5% lower and the Shanghai Composite slipping 0.1%. The Hong Kong Hang Seng Index dropped 1.1%. AI stocks fell 0.6%, after previously surging by 12% following the reopening after Chinese New Year, largely driven by advancements from startup DeepSeek.

Adding to the tumult, Hong Kong-listed tech majors fell 2.7%, ending their streak of gains, while semiconductor shares declined 1.1% in response to Trump's tariff hikes on steel and aluminium imports. The announcement of potential tariffs on cars, semiconductor chips, and pharmaceuticals also stirred concerns in the market.

(With inputs from agencies.)