Asian stocks surge as Anthropic IPO lifts sentiment ahead of earnings, central banks

Asian markets experienced a surge on Tuesday due to the anticipated IPO of AI company Anthropic and the upcoming central bank meetings. Anthropic disclosed significant loss but also showcased high revenue growth in its filing for a US initial public offering, fueling investors' interest in the potential profitability of massive AI spending.

Meta Platforms announced plans to raise up to US$95 billion in its largest-ever equity fundraising, further boosting sentiment. Meanwhile, currency markets remained relatively stable as central banks from the Federal Reserve, European Central Bank, and Bank of Japan prepared to make policy decisions. Tech-heavy Korea's KOSPI rose by more than four percent, and Japan's Nikkei was up 1.9 percent.

MSCI's Asia-Pacific index outside Japan increased by 1.2 percent. Nasdaq futures soared by 0.4 percent after US chip stocks climbed by 2.8 percent overnight, marking the highest one-day jump in a month. Over a third of S&P 500 companies were set to release earnings this week, with investors eager to see if AI-related demand extends beyond these interconnected relationships and supports ongoing infrastructure growth.

Analyst Anthony Saglimbene stated that investors require assurance that heavy capex spending is driven by genuine business needs and that profitability will persist as new infrastructure is introduced. Brent crude futures declined by 0.7 percent to US$114.95 a barrel, moving away from a six-month peak as investors assessed the possibility of a resolution in the US-Israeli war with Iran, which helped alleviate supply concerns; however, market sentiment remained uncertain.

Nick Twidale, chief market strategist at ATFX Global, emphasized that supply remains the primary concern, and any developments threatening physical exports could cause Brent to retest recent highs and potentially surge towards US$120. The ongoing eight-month-long war in the Middle East has had repercussions on oil prices, escalating inflation concerns and altering the outlook for global interest rates, emphasizing the significance of central bank decisions this week.

Fed policymakers indicated they would not raise short-term borrowing costs again this week, but investors anticipate a rate-hike pause will not endure for long, with traders pricing in a hike from the Fed in December. Geng Ngarmboonanant, head of macro and policy at J.P. Morgan Asset Management, expressed confidence that the US economy would handle higher interest rates.

The US 10-year Treasury note's yield remained constant at 4.992 percent, below the 5 percent level breached in September as investors flocked to Treasuries for safety amid AI worries in the stock market. The Japanese yen was the favored currency in the foreign exchange markets, trading at 157.72 per dollar ahead of the Bank of Japan's decision on Friday.

The central bank is expected to declare victory in its 14-year effort to achieve its 2 percent inflation target and hint at a possible rate hike as soon as December. In commodities, gold decreased slightly and was last trading at US$4,013.70 per ounce.