London (AFP) – Tech firms rallied Tuesday following a healthy run-up on Wall Street as traders welcomed AI titan Anthropic’s IPO filing that revived optimism over the sector.
London’s benchmark FTSE 100 index was dragged down by HSBC, whose share price shed 6.5 percent after the bank’s bumper profits undershot market expectations. Mercedes-Benz shed 3.4 percent in Frankfurt after the German carmaker cut its full-year outlook, underperforming the DAX index which rose slightly overall in midday deals.
Equity gains were concentrated in South Korea and Japan, with other Asian and European stock markets seeing a mixed performance as traders digest key earnings and await central bank decisions in coming days. “Stocks rallied after Anthropic’s IPO filing reignited the AI trade after a bruising three weeks, bolstering risk sentiment,” noted Neil Wilson, investor strategist at Saxo UK.
In submitting plans to list its shares, Anthropic, one of the world’s leading artificial intelligence companies, Monday reported first-half revenue surged about 1,300 percent year-on-year, but also flagged safety risks. The sale is seen as a crucial test of whether the AI boom can deliver profits, and a disappointing reception could dent enthusiasm further, with traders questioning the vast sums invested in the sector as well as several companies’ financial positions.
The filing lays out risks specific to an industry that has faced a string of reports in recent months of AI systems behaving in unexpected and harmful ways. Still, Wall Street-listed tech firms rallied Monday, pulling the Nasdaq and S&P 500 higher along with the Dow, and futures contracts indicated they would open higher again on Tuesday.
Seoul’s stock market briefly jumped more than four percent Tuesday thanks to strong gains in chipmakers SK Hynix and Samsung. Tokyo added 1.8 percent on spikes in Tokyo Electron, Advantest, and SoftBank. “Sentiment towards technology has improved as investors assess Anthropic’s IPO filing at the start of a week packed with corporate earnings and the Federal Reserve’s rate decision,” said Fiona Cincotta at FOREX.com.
Investors are awaiting earnings this week from Magnificent Seven members Microsoft, Alphabet, and Amazon as well as SK Hynix and Samsung. Facebook parent Meta on Monday said it plans to raise $35 billion through a stock offering to fund the development of its artificial intelligence. Google parent Alphabet recently raised $85 billion through equity offerings to fund its own AI data centre expansion.
The Fed is expected to keep interest rates on hold in a decision due Wednesday, though CME Group’s FedWatch tool says there is a 70 percent chance of a hike when it meets in December owing to elevated inflation. The European Central Bank and Bank of Japan are also expected to hold tight in announcements due Thursday and Friday respectively.
– Key figures at around 1130 GMT –
London – FTSE 100: DOWN 0.7 percent at 10,687.67 points
Paris – CAC 40: UP 0.3 percent at 7,874.71
Frankfurt – DAX: UP 0.2 percent at 25,458.01
Tokyo – Nikkei 225: UP 1.7 percent at 63,268.37 (close)
Seoul – Kospi: UP 3.1 percent at 5,638.34 (close)
Hong Kong – Hang Seng Index: DOWN 0.7 percent at 23,041.32 (close)
Shanghai – Composite: DOWN 1.3 percent at 3,650.47 (close)
New York – Dow: UP 0.3 percent at 52,361.58 (close)
Brent North Sea crude: DOWN 1.0 percent at $114.69 per barrel
West Texas Intermediate: DOWN 0.9 percent at $100.89 per barrel
Euro/dollar: DOWN at $1.1148 from $1.1182 on Monday
Pound/dollar: DOWN at $1.3322 from $1.3349
Dollar/yen: UP at 157.64 yen from 157.45 yen
Euro/pound: DOWN at 83.67 pence from 83.78 pence
© 2024 AFP
