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

Asian markets experienced a surge on Tuesday as the anticipated initial public offering of AI company Anthropic sent ripples of optimism through the risk appetite curve. The tech-heavy KOSPI in South Korea saw a gain of over 4%, while Japan’s Nikkei rose 1.9%. MSCI’s Asia-Pacific index outside Japan saw a 1.2% increase.

Investors were also closely watching central bank meetings to gauge their impact on near-term interest rates. Meta Platforms announced plans to raise up to $95 billion in its largest-ever equity fundraising, further boosting sentiment. However, the currency markets remained relatively stable and muted ahead of policy decisions from the Federal Reserve, European Central Bank, and Bank of Japan.

Economists anticipate all three central banks to stand pat on interest rates, focusing instead on comments from policymakers to gauge the rates outlook. Tech companies in the US are set to report earnings this week, with hyperscalers Alphabet, Microsoft, and Amazon among the most anticipated.

Despite the optimism, there remains a degree of caution. Over a third of S&P 500 companies are scheduled to report earnings this week, with investors seeking evidence that demand for AI infrastructure is growing beyond just the interconnected relationships of these companies. Anthony Saglimbene, Ameriprise’s chief market strategist, stated that investors will require assurance that heavy capex spending reflects durable business needs and that profitability will be sustained as new infrastructure comes online.

Concerns over supply continue to linger, with Brent crude futures easing 0.7% to $114.95 a barrel after a six-month high. Investors are closely watching developments that could address the US-Israeli war with Iran, as supply fears remain a concern, albeit with a generally more optimistic outlook.