Australian shares are expected to return from the holiday break in the red following a tech-led decline on Wall Street due to fears of competition from China over artificial intelligence.

On macroeconomic data, the National Australia Bank business confidence report is due at 11:30 am Sydney time.

Overnight, the tech-heavy Nasdaq Composite tumbled 3.1%, while the S&P 500 dropped 1.5%. The Dow Jones Industrial Average rose 0.7%.

A Chinese startup called DeepSeek unveiled a powerful AI model that rivals OpenAI's GPT-4 at a fraction of cost, threatening the dominance of other industry players in Silicon Valley. DeepSeek's AI model spooked the US' tech market, with Nvidia, the world's most valuable company, tumbling nearly 17%.

In Australian corporate news, Stanmore Resources (ASX:SMR) produced 3.3 million tonnes of saleable coal during the fourth quarter of full-year 2024, down from 3.8 million tonnes in the third quarter, according to a Monday filing with the Australian bourse.

Australia's benchmark index gained 0.4%, or 30.20 points, on Jan. 24 to close at 8,408.90.