Asian equity markets mostly declined in light trading on Tuesday, as exchanges in China, South Korea, Taiwan, and Indonesia were closed for the Lunar New Year celebrations.
Concerns over tariffs remained prevalent, especially as Scott Bessent, nominated by President Donald Trump for the position of Treasury Secretary, advocated for new tariffs. Bessent cautioned that middle-class Americans could face significant challenges if tax cuts lapse at year-end.
The U.S. dollar appreciated against other currencies following Trump's announcement of plans to implement extensive tariffs on imports of steel, aluminum, copper, semiconductors, and pharmaceuticals. This strategy aims to bolster domestic production in these sectors.
Gold prices remained stable during Asian trading, with investors cautiously awaiting insights from upcoming Federal Reserve and European Central Bank meetings.
Oil prices regained some stability, though they remained near a two-week low due to disappointing economic data released from China.
Japan's markets spearheaded regional declines as technology stocks suffered setbacks amid concerns over a newly introduced Chinese artificial intelligence model. The Nikkei average decreased by 1.39 percent, settling at 39,016.87, while the Topix index experienced a slight dip to 2,756.90.
Technology-focused investment giant Softbank plunged 5.2 percent, Advantest dropped 11.1 percent, and Tokyo Electron declined by 5.7 percent.
In contrast, Hong Kong's Hang Seng index edged up 0.14 percent, closing at 20,225.11 in trading thinned by holiday activities. Shares of Alibaba Group Holding increased by 1.2 percent, while Tencent saw a 1.4 percent rise, spurred by growing optimism regarding China's AI advancements.
Australian stocks finished marginally down as investors anticipated the fourth-quarter Consumer Price Index data release scheduled for Wednesday. The key S&P/ASX 200 index slipped 0.12 percent to 8,399.10, with losses led by property developers, energy, and technology stocks. The broader All Ordinaries index decreased by 0.18 percent, ending at 8,644.50.
Across the Tasman Sea, New Zealand's benchmark S&P/NZX-50 index fell by 0.33 percent to 12,957.15.
U.S. markets had previously closed lower, with a significant sell-off in technology stocks. This followed breakthroughs by DeepSeek that raised questions about the sustainability of Silicon Valley's substantial investment in artificial intelligence and the overall advantage of U.S. technological prowess. The tech-focused Nasdaq Composite plummeted 3.1 percent, while the Dow Jones Industrial Average dipped 0.7 percent and the S&P 500 declined by 1.5 percent.
