Live Markets: Deepseek mauling ignites appetite for AI stocks at bargain prices
28/01/2025 17:17
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U.S. equity indexes higher, Nasdaq up ~1.7%
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Tech leads S&P 500 gainers; utilities lag
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Euro STOXX 600 index up ~0.4%
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Dollar, gold, edge higher; crude dips, bitcoin up >1%
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U.S. 10-Year Treasury yield rises to ~4.57%
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DEEPSEEK MAULING IGNITES APPETITE FOR AI STOCKS AT BARGAIN
PRICES
Not everyone sold U.S. stocks after DeepSeek's low-cost
artificial intelligence model gave a reality check to the
tech-related giants whose valuations have ballooned over the
past two years.
J.P. Morgan estimated that some retail investors donned a
risk-on mode on Monday, with net buying of $1.27 billion in cash
equities and $1.26 billion in options.
Institutional investors also lapped up stocks that looked
cheaper, with equities witnessing $14.2 billion of net cash
buying and $2 billion in options delta during market hours, the
brokerage said.
Strong demand was seen for largecap tech and broad-based
multi-cap exchange traded funds (ETFs) with at least four of
them seeing inflows of $700 million, J.P.Morgan said.
Aurora Mobile's shares JG.O had doubled in value in the
previous session, after the China-based firm said it integrated
DeepSeek's large language model (LLM).
The stock saw inflows that stood 10 standard deviations
higher than its historical long-term average, signaling strong
investor interest, according to the brokerage.
Over the past six months retail investors' concentration in
the megacap 'Magnificent Seven' group of megacap stocks have
been marginal - with Meta META.O leading with 23%, Nvidia
NVDA.O at 13% and Apple AAPL.O the least with 4.8%, data by
J.P.Morgan showed.
But who can resist when the world's leading chip stock,
Nvidia NVDA.O , that jumped more than 800% in value from the
end of 2022 through the end of 2024, was trading at 26.76x times
its 12-month forward earnings - its lowest in one year,
according to data compiled by LSEG.
The stock alone saw inflows of 1 standard deviation above
its historical average according to J.P.Morgan, while on the
other hand, short sellers made profits of about $6.7 billion
from its 17% decline, according to Ortex data.
Separately, data from Vanda Research also showed retail
purchases of Nvidia shares totalled a net $562.2 million on
Monday, the largest amount on records going back to 2014.
(Johann M Cherian, Pranav Kashyap)
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FOR TUESDAY'S EARLIER LIVE MARKETS POSTS:
TUESDAY'S DATA DISAPPOINTS: CONSUMER CONFIDENCE, DURABLE
GOODS, HOME PRICES -
CLICK HERE
THE PATIENT IS IN STABLE CONDITION - CLICK HERE
OUT OF THE GATE, DIVIDENDS PROVING NOBLE - CLICK HERE
THE YEAR OF THE SNAKE - CLICK HERE
CAPITAL GOODS: INVESTORS ON ALERT OVER CHINESE COMPETITION -
CLICK HERE
THREE CATALYSTS TO SUPPORT EUROPE'S RE-RATING - CLICK HERE
STOXX 600 RISES AS INVESTORS EVALUATE DEEPSEEK IMPACT -
CLICK HERE
EUROPE BEFORE THE BELL: FUTURES MOSTLY HIGHER AFTER DEEPSEEK
WOBBLE - CLICK HERE
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Consumer confidence jobs https://reut.rs/3CheQhX
Core capital goods and cap goods manufacturers https://reut.rs/4hyp503
Case Shiller home prices v mortgage demand https://reut.rs/3PVI1dw
DeepSeek-related selloff makes Nvidia cheapest in a year https://tmsnrt.rs/4jzcnQA
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