Asian shares tumble, oil rises as markets await AI sector results

Asian stock markets experienced a decline on Tuesday as investors turned cautious ahead of key corporate earnings results, particularly from AI sector leaders. Meanwhile, oil prices continued their upward trend, driven by geopolitical uncertainties and the US executive order waiving sanctions on Russian energy. The U.S. dollar remained strong against the euro during this period, reflecting safe-haven demand amid unrest in France.

Corporate earnings from Meta, Tesla, and chipmakers like Lam Research and Texas Instruments are anticipated to provide fresh insights into consumer and economic resilience. Market participants are prepared to cover short positions and unwind defensive strategies, but analysts caution that this does not equate to a renewed confidence in aggressively investing in AI.

The MSCI Asia ex-Japan index dropped 0.93%, while Japan's Nikkei 225 fell 1.28%. South Korea's KOSPI saw a more pronounced decline of 3.61%. The euro maintained its relative strength, with a 0.06% increase against the US dollar. Notably, Meta, as one of five major AI hyperscalers, is projected to increase its combined capital expenditure to approximately $1.2 trillion next year, according to Goldman Sachs.

The sector's earnings growth expectations are soaring, with a projected doubling of earnings compared to the previous year. South Korean AI infrastructure firm Elice Group's initial public offering saw its shares open 16% lower than their IPO price, marking a significant setback for the company. Brent crude prices increased by 0.21% to $109.78 a barrel, while US West Texas Intermediate gained 0.15% to $103.82 a barrel.