European tech shares came under pressure on Monday after Chinese tech start-up DeepSeek’s low-cost artificial intelligence (AI) model sparked worries about returns in the AI business and the need for costly chips.
DeepSeek, which overtook rival ChatGPT to become the top-rated free application on Apple’s App Store in the US, says it uses lower-cost chips and less data, challenging a widespread bet in markets that AI will drive demand along a supply chain from chipmakers to data centres.
Dublin
The Irish index of shares was marginally higher, gaining 0.67 per cent over the session.
Banking shares were mixed, with AIB falling just under 0.7 per cent after the State launched another block sale of a 5 per cent stake in the lender. This will reduce the State’s holding to 12.5 per cent in AIB, with analysts expecting that to decline to zero by the middle of this year. Bank of Ireland shares were almost 0.8 per cent higher on the day, while Permanent TSB was down 2.2 per cent.
Ryanair shares advanced more than 3 per cent following the company’s publication of its quarterly results, which showed a profit after tax of €149 million in the three months to the end of December. Chief executive Michael O’Leary said he expected airfares to rise this year, with delivery delays from plane-makers Airbus and Boeing squeezing capacity on aircraft.
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Food stocks Kerry and Glanbia ticked higher, gaining 0.99 per cent and 0.64 per cent respectively. Shares in Kingspan fell almost 2.3 per cent by the end of the session.
London
British equities started the week on a subdued note, with industrial metal miners dragging the index lower, while investors brace for the Federal Reserve’s rate decision later in the week.
The benchmark FTSE 100 ended flat after hitting a record high on Friday.
Technology stocks were the decliners on the domestically-focused midcap FTSE 250 that lost 0.7 per cent, with Polar Capital Technology Trust and Allianz’s technology investment trust down 6.8 per cent and 5.2 per cent, respectively.
Cigarette companies such as British American Tobacco and Imperial Brands rose 4.7 per cent and 1.4 per cent respectively after US president Donald Trump’s administration withdrew a plan to ban menthol cigarettes.
Europe
The pan-European Stoxx 600 dropped as much as 0.8 per cent earlier in the day, tracking a global market sell-off on concerns about AI investment and tech sector valuations.
European tech stocks slid 3.4 per cent and were on track for their biggest daily drop since October, with chip equipment maker ASML dropping 7 per cent to touch a two-month low and ASM International slumping more than 12 per cent.
Siemens Energy and Schneider Electric, which provides electric hardware for AI infrastructure, sank 19.9 per cent and 9.5 per cent respectively and were among the weakest performers on the STOXX 600.
The sell-off comes after the Stoxx 600 touched an intraday record high on Friday and as investors await earnings from US tech giants Apple, Meta, Microsoft and Tesla later this week.
New York
US technology shares dropped sharply on Monday as surging interest in DeepSeek’s low-cost AI model raised doubts about the sector’s lofty valuations.
The tumble in global equities prompted a widespread flight to safety, with US government bonds rising and safe-haven currencies — the yen and Swiss franc — surging.
On Wall Street, the Dow Jones Industrial Average fell 0.15 per cent, to 44,358, the S&P 500 dropped 1.8 per cent, to 5,991 and the Nasdaq Composite slumped about 3 per cent, to 19,360.
Nvidia, whose chips are the top choice for powering AI applications, dropped about 15 per cent on the day in line with industry peers Broadcom and Marvell Technology. — Additional reporting: Reuters
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