Is the AI euphoria moving to Asia?

In recent weeks, Asian stocks have rallied, with Alibaba’s sold earnings report boosting China’s tech optimism further. The question doing the rounds in markets: is the ai euphoria moving to Asia from America?

Last week's moves in Asian stocks give us a glimpse of euphoria in the regional tech stocks. An Asian stocks gauge jumped more than 1 per cent to its highest since November 8 on Friday, marking a sixth straight week of gains. That was also the longest such winning streak in over two years.

Chinese tech shares lift Asian markets

The Hang Seng index rose to a three-year peak. The Hang Seng index surged nearly four per cent to its highest level since February 2022, driven by a 14.7 per cent jump in Alibaba shares following strong earnings.

The Hang Seng tech index climbed over six per cent. China's stock index gained over one per cent. The latest ai breakthrough by Deepseek has investor enthusiastic in China’s technological prowess. That has propelled Chinese stocks to new heights in recent days.

European and US stocks took a hit last week on weak economic data. US stocks have retreated from record highs as concerns around trade tariffs weighed on sentiment. Wall street suffered a broad selloff on Friday as investors grappled with weak economic data and persistent inflation concerns, prompting a flight to safer assets.

Fresh economic reports fuelled concerns about a slowing US economy, with the University of Michigan consumer sentiment index falling sharply in February-- now that heightened inflation worries amid potential new tariffs meanwhile, existing home sales fell more than expected, and the US services PMI dipped into contraction territory, intensifying investor caution.

One month after trump's inauguration, the investor euphoria around the so-called trump trade and the ai euphoria is fading. The S&P 500's record run still trails European, Chinese and Mexican benchmarks, crypto assets are off their peak and the greenback looks anaemic.

The dollar was trading near its year-to-date lows as the bulls were starting to get nervous. The conflict-of-interest narrative is also gaining traction. Despite a broader market weakness, Elon Musk's companies are set to add 613 billion dollars in value since the election.

Commerce secretary Howard Lutnick built a new dynasty on wall street as he handed control of Cantor Fitzgerald to his sons. Looking ahead, investors will focus on fresh economic data, including fed policy signals. Geopolitical developments, particularly in Ukraine and US-China trade relations, will also be closely monitored.

(With inputs from the agencies)