Asian Shares Rise on AI Optimism, Shrugging Off Trump's Colombia Tariffs

Tokyo: Asian equities advanced Monday, buoyed by optimism surrounding artificial intelligence (AI) in China. Chinese tech companies aligned with AI firm DeepSeek's business model surged after the startup gained traction.

Hong Kong and Mainland China: Shares also gained in Hong Kong and mainland China. However, US stock index futures slid in Asia due to concerns that DeepSeek may challenge American technological leadership.

Currency Markets: The US dollar strengthened, while US Treasuries gained, reflecting caution after President Donald Trump imposed tariffs on Colombia for refusing to accept deported migrants. The Mexican peso declined.

China's Manufacturing Activity: China's factory activity unexpectedly contracted in January as production tapered off ahead of the Lunar New Year holiday. The official manufacturing purchasing managers' index (PMI) fell to 49.1 from 50.1 in December.

Fed Rate Decision: The US Federal Reserve is expected to keep interest rates unchanged at its two-day meeting concluding Wednesday, marking a pause in its rate-cutting cycle.

Commodities: Oil recorded its first weekly decline of the year following Trump's threats of sanctions on Russia and his demand that OPEC+ reduce crude prices. Coffee prices will be monitored closely following tariffs imposed on Colombia, the third-largest producer globally.

Key Events This Week:

* ECB President Christine Lagarde's speech (Monday)
* US consumer confidence and durable goods data (Tuesday)
* US rate decision (Wednesday)
* Tesla, Microsoft, Meta, and ASML earnings (Wednesday)
* ECB rate decision (Thursday)
* US GDP, jobless claims, and PCE inflation data (Thursday)

Market Movements:

Equities:

* S&P 500 futures: -0.9%
* Nikkei 225 futures: Unchanged
* Hang Seng: +1%
* Shanghai Composite: +0.7%

Currencies:

* Bloomberg Dollar Spot Index: +0.2%
* Euro: -0.3% to $1.0465
* Japanese yen: +0.3% to 155.48 per dollar

Cryptocurrencies:

* Bitcoin: -2.8% to $101,655.72
* Ether: -2.8% to $3,203.5

Bonds:

* 10-year Treasury yield: -4 basis points to 4.58%

Commodities:

* West Texas Intermediate crude: -1% to $73.88 per barrel
* Spot gold: -0.3% to $2,763.41 per ounce