Chinese AI Startup DeepSeek Shakes Global Tech Markets, Impacting Canadian Stocks

Toronto Stocks Retreat on Tech Selloff; Celestica Falls as China's DeepSeek Casts Doubt on Western AI Model

Toronto stocks were firmly lower in middat trading Monday as China's low-cost AI startup DeepSeek sent jitters across the markets that led a broad-based selloff. Canada's tech sector was the main decliner of the session, followed by materials and utilities stocks. Canada's S&P/TSX Composite Index fell 0.9% to 25230.11, and the blue-chip S&P/TSX 60 declined by 0.6% to 1520.52. Celestica shares fell in step with other major tech companies due to the emergence of DeepSeek. Celestica is deeply invested in AI for various applications, including energy delivery, as well offering products that are used in major energy-consumer data centers. The stock is down 25% at 131.54 Canadian dollars (91.69). Other market movers: Shares of Canadian uranium producers also fell sharply on the news casting fresh doubt on whether the AI boom will demand the massive energy consumption that many had anticipated, much of which was planned to be fueled by nuclear energy. Cameco shares were down over 11% at C$71.13, while NexGen Energy's stock fell 12% to C$9.13 a share. Denison Mines was down $9.2% at C$2.63, and Energy Fuels' stock declined 9.3% to C$7.44 a share. Write to Adriano Marchese at [email protected]

TSX futures slide as China's low-cost AI model spooks tech investors

(Reuters) - Futures tied to Canada's main stock index fell on Monday, joining the global market rout, as investor confidence in artificial intelligence-linked stocks was shaken by the rising popularity of a Chinese discount AI model. December futures on the S&P/TSX index were down 0.8% at 6.45 a.m. ET (1145 GMT). Wall Street futures also dropped sharply after a selloff in AI-related shares. [.N] Chinese startup DeepSeek last week launched a free AI assistant that it says uses lower-cost chips and less data, challenging the belief that AI will boost demand across the supply chain, from chipmakers to data centers. The Toronto Stock Exchange's S&P/TSX composite index ended higher for a ninth straight day on Friday, as the prospect of strong U.S. economic growth under the Trump administration outweighed expected trade tariffs. Investors will be closely watching interest rate decisions from the Bank of Canada and the U.S. Federal Reserve on Wednesday. The Canadian central bank has reduced rates by a cumulative 1.75 percentage points since June 2024 and is anticipated to cut rates by an additional 25 basis points. Analysts will also watch out for the policymakers' commentary as they navigate risks of U.S. trade tariffs. On the flipside, the Fed is expected to keep rates unchanged. Among commodities, Gold prices dipped on Monday as the U.S. dollar strengthened. [GOL/] Oil prices, rose slightly, with traders remaining cautious despite the U.S. retracting threats of sanctions against Colombia, easing fears of immediate supply disruptions. [O/R] In corporate news, investment firm Brookfield Asset Management said on Monday it has closed two real-estate investments in Japan worth a combined $1.6 billion. (Reporting by Ragini Mathur in Bengaluru; Editing by Sahal Muhammed)