(Jan 28): Malaysian stocks hit a near six-month low on Monday in tandem with a global tech rout after the emergence of a low-cost Chinese artificial intelligence model, while fresh US tariff threats weakened currencies in Asia.

Malaysian stocks slipped as much as 0.9% to their lowest level since Aug. 6. Utility conglomerate YTL Power, which builds and owns data centres, was the top drag on the index, slumping 6% 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 global investors' radar.

MSCI's information technology index for Asia-Pacific excluding Japan fell 0.6% on the day. Taiwanese and South Korean stock markets, which make up around 65.3% and 15.5% of the index, respectively, were closed for a holiday.

A free AI assistant that uses lower-cost chips and less data was launched by Chinese startup DeepSeek last week, triggering jitters across global markets as it threatens the dominance of sector leaders such as Nvidia.

"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 emerging Asia weakened, with the Singapore dollar slipping 0.6%. The Malaysian ringgit and the Thai baht fell 0.5% and 0.2%, respectively.

US President Donald Trump said on Monday he plans to impose tariffs on imported computer chips, pharmaceuticals and steel, a day after the US and Colombia pulled back from the brink of a trade war.

"Tariff developments remain fluid and uncertain in terms of timing, magnitude and scope of products. As such, we should continue to see more two-way trades dominate especially after the clean-out of some dollar long positions," said Christopher Wong, forex strategist at OCBC.

Trading across the region is expected to remain quiet this week as some bourses are shut for holidays, mostly for the Lunar New Year.

Investors await the US Federal Reserve's policy meeting this week, with the central bank widely expected to keep interest rates unchanged. Focus will also be on how the Fed confronts Trump's demand to lower rates.

Uploaded by Magessan Varatharaja