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

On October 27, Asian stocks rose sharply, propelled by the artificial intelligence (AI) pioneer Anthropic's anticipated IPO filing and positive sentiment ahead of tech earnings. Anthropic disclosed substantial revenue growth and steep losses in its US initial public offering filing, fueling investor interest in the AI boom's profitability potential.

Meta Platforms announced plans to raise up to $95 billion in its largest equity fund-raising, further boosting market sentiment. Meanwhile, central bank meetings loomed large, with the Federal Reserve, European Central Bank, and Bank of Japan set to meet, influencing short-term interest rates.

Tech-heavy South Korea's KOSPI rose more than 4% in early trading, while Japan's Nikkei climbed 1.9%. MSCI's broad Asia-Pacific index outside Japan surged 1.2%. Nasdaq futures climbed 0.4%, marking its largest one-day gain in a month, driven by US chip stocks that jumped 2.8% overnight. European stock futures fell 0.23%. Over a third of S&P 500 companies were set to report earnings, including tech giants Alphabet, Microsoft, and Amazon.com.

Anthony Saglimbene, Ameriprise's chief market strategist, noted that investors would need evidence of AI demand extending beyond interconnected relationships to support infrastructure expansion. Brent crude futures fell 0.7% to $114.95 a barrel, moving away from a six-month high as the potential resolution of the US-Israeli war with Iran eased supply concerns. However, supply remained a key worry, as any disruption could push Brent back towards $120, said Nick Twidale, chief market strategist at ATFX Global.

The ongoing eight-month-long war has impacted Middle East oil prices, inflating inflation concerns and altering the interest rate outlook, sharpening the focus on central bank decisions. Fed policymakers indicated no further short-term borrowing cost hikes this week, but a December hike is expected. Despite inflation concerns, economists believe the US economy can handle higher interest rates.

The yield on the US 10-year Treasury note stayed below 5%, which it breached in September due to safety-seeking during stock market turmoil over AI worries. The Japanese yen served as a safe-haven currency, trading at 157.72 per dollar ahead of the Bank of Japan's (BOJ) decision on October 30. The BOJ is expected to declare victory in its 14-year battle to hit its 2% inflation target, signaling a potential interest rate hike as early as December. Gold dipped slightly, settling at $4,013.70 per ounce.