TOKYO, Oct 20 : Asian stocks retreated broadly on Tuesday while oil rose as geopolitical risks rattled sentiment ahead of key results from AI bellwether companies.
The dollar held firm against the euro as riots in France fuelled demand for safe-haven assets. Crude prices resumed their climb as markets weighed an executive order from US President Donald Trump that waived some sanctions and tariffs on Russian energy.
The spotlight now turns to corporate earnings, with investors seeking fresh evidence that consumers and the broader economy remain resilient. Results are due from Meta on Wednesday and later in the week from Tesla and chipmakers Lam Research and Texas Instruments.
"The market is happy to cover shorts and unwind defensive trades, but that's very different from having the conviction to rebuild aggressive exposure to AI," Chris Weston, head of research at Pepperstone, said in a note. "French sovereign risk is clearly being priced into European equities, but the euro's resilience suggests traders aren't yet treating it as a systemic European problem."
The MSCI Asia ex-Japan index fell 0.93 per cent, while Japan's Nikkei 225 dropped 1.28 per cent. South Korea’s KOSPI tumbled 3.61 per cent.
The dollar index fell 0.05 per cent to 101.92, while the euro strengthened 0.06 per cent to $1.12, following a 0.25 per cent slide on Monday. The British pound tacked on 0.06 per cent to $1.33 and the yen weakened 0.03 per cent to 158.57 per dollar.
Meta is one of five AI hyperscalers expected to increase combined capital expenditure to about $1.2 trillion next year, according to Goldman Sachs. Results from SpaceX are also due on Tuesday.
"The dominance of technology hardware in driving earnings growth and equity price appreciation means expectations are high, with the sector globally forecast to see a doubling of earnings compared to the same quarter a year ago," Daniel Morris, chief market strategist for AXA IM Core Investments at BNP Paribas Asset Management, said in a note. "For emerging markets, it is twice that."
Shares in South Korean artificial intelligence infrastructure company Elice Group opened 16 per cent lower than their initial public offering price in their market debut, after the firm raised 201.1 billion won ($151.12 million) in an IPO.
Brent crude rose 0.21 per cent to $109.78 a barrel, while US West Texas Intermediate gained 0.15 per cent to $103.82 a barrel. Spot gold fell 0.51 per cent to $4,118.71 an ounce.
An executive order issued by Trump on Friday night waived key Russia-related US sanctions and tariffs, including duties on the country's goods and penalties for buying its oil and gas. However, Trump said on Saturday he has yet to announce a final decision on the matter.
Overnight, French authorities set curfews in parts of several cities including Paris, Lille and Nice, after a weekend of riots and looting stemming from nationwide anti-government protests.
Recent comments from Federal Reserve officials, including Chair Kevin Warsh, suggest policymakers are in no rush to hike rates again. On Friday, Warsh expressed optimism about US economic strength but gave no indication of whether or when more hikes will be needed.
European Central Bank policymaker Martin Kocher is due to speak later on Tuesday, as well as ECB policymaker and Finnish central bank governor Olli Rehn. Bank of England Monetary Policy Committee member Megan Greene will deliver a speech at the London School of Economics.
Euro Stoxx 50 futures fell 0.71 per cent, DAX futures slipped 0.40 per cent and FTSE futures dropped 0.44 per cent. S&P e-minis were flat at 7,734.25.
Bitcoin dropped 0.67 per cent to $81,386.40, and ether fell 0.54 per cent to $2,385.75.