BENGALURU: Malaysian shares hit a near six-month low on Tuesday joining a global AI selloff triggered by the emergence of a low-cost Chinese artificial intelligence model, while currencies in Asia declined after fresh US tariff threats.
Malaysian stocks slipped as much as 0.9% to their lowest level since early August. Utility conglomerate YTL Power , which builds and owns data centers, was the top drag on the index, slumping 9% to a two-month low.
Last year, Malaysian equities were on a tear led by builders and suppliers due to an AI-driven data centre boom, putting a long-overlooked market back on the radar of global investors.
MSCI’s information technology index for Asia-Pacific excluding Japan fell 0.6%. Taiwanese and South Korean stock markets, which make up around 65.3% and 15.5% of the index, respectively, were closed for a holiday.
Overnight, tech-heavy Nasdaq index fell 3.1% on jitters over a free AI assistant launched by Chinese startup DeepSeek last week that it says uses lower-cost chips and less data, threatening dominance of sector leaders such as Nvidia . This led to a record one-day loss of $593 billion of the chipmaker’s market value for any company on Wall Street.
“The rout triggered by DeepSeek reveals panic about misallocation, not despondency about growth prospects for AI per se,” said Vishnu Varathan, head of macro research, Asia excluding-Japan, Mizuho.
The US dollar steadied after it took a hit overnight amid a broad shakeout in financial markets.
Currencies in the region weakened, with the Singapore dollar slipping 0.6%. The Malaysian ringgit and the Thai baht fell 0.5% and 0.3%, respectively.
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