Market jitters over a cheaper China-built artificial intelligence model hit global technology stocks and saw the ASX begin the week on a more cautious note.
This contributed to copper slumping 2% to US$9,095 ($14,470) a tonne.
ANZ Economist Madeline Dunk says tech stocks led declines in key US indices as Chinese AI startup DeepSeek’s latest R1 model sees investors question the valuations of US AI and tech companies.
“Base metals slumped amid a broader risk off tone across markets triggered by a selloff centred on the technology sector,” she says.
“This wasn’t helped by economic data from China that fuelled concerns of overgrowth. Factory activity unexpectedly slowed ahead of the Lunar New Year holiday.”
In Australia, all eyes will be on fourth-quarter Consumer Price Index data being released tomorrow (29 January).
The ANZ anticipates trimmed mean inflation to print at 0.5% quarter over quarter, which would be the lowest quarterly result since the second quarter of 2021.
This would see the annual rate drop 0.3 percentage points to 3.2% year over year, which ANZ says is below the Reserve Bank of Australia’s forecast of 3.4% year over year.
Meanwhile, the six-month annualised rate for trimmed mean inflation is expected to fall to 2.6%, around the middle of the RBA’s target band.
“With the RBA Board’s post-meeting statement in December noting it was ‘gaining some confidence that inflation is moving sustainably towards target’, we think that a downside surprise to the RBA’s published forecasts, in line with our expectations of a 0.5% quarter-over-quarter print for the trimmed mean, will see the RBA cut in February,” Dunk says.
The S&P/ASX 200 edged down 7.2 points to 8,401.7 points as of 10.30 AEDT.
Over the last five days, the index has gained 0.65% and is 1.32% off its 52-week high.
More sectors were lower at the opening bell than higher. Materials was one of the few in the green with a 0.29% tick up, while energy slipped 0.25%.
Mining services firm Monadelphous (ASX:MND) led the top five with a 3.43% gain to $15.39.
Meanwhile, the uranium miners found themselves on the sliding end of the scale. Deep Yellow (ASX:DYL) retreated 16.15% to $1.2, Paladin Energy (ASX:PDN) dropped 12% to $7.92 and Boss Energy (ASX:BOE) slipped 11.04% to $2.82.
The S&P/ASX200 is Australia’s leading share market index and contains the top 200 ASX-listed companies in terms of market capitalisation, and accounts for about 80% of the country’s equity market. The index is designed to measure the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalisation.
It is recognised as the institutional investable benchmark in the country.
Write to Angela East at Mining.com.au
Images: ASX & Stock
