Asian stock markets fell sharply on Tuesday as rising oil prices, geopolitical uncertainty and concerns over European political stability weighed on investor sentiment. Traders remained cautious ahead of major US technology earnings that could provide fresh insights into artificial intelligence spending and consumer resilience.
South Korea's KOSPI led regional losses, plunging 3.61%, while Japan's Nikkei 225 declined 1.28%. The MSCI Asia-Pacific index excluding Japan dropped 0.93%, reflecting widespread selling across Asian equities.
Investors are closely watching upcoming earnings reports from Meta, Tesla, Lam Research and Texas Instruments. These results could reveal whether consumer demand remains strong and whether companies can sustain their substantial investments in AI infrastructure.
According to Goldman Sachs, Meta and four other major AI hyperscalers are expected to increase their combined capital expenditure to approximately $1.2 trillion next year. Strong revenue growth, resilient consumer spending and improving profit margins could help restore confidence in technology stocks.
However, analysts warn that elevated valuations and ambitious AI investment plans leave little room for disappointing earnings.
Meanwhile, South Korean AI infrastructure company Elice Group experienced a difficult stock market debut, opening 16% below its initial public offering price after raising approximately $151 million.
Oil prices continued climbing as investors assessed developments surrounding US sanctions on Russian energy. Brent crude gained 0.21% to $109.78 per barrel, while West Texas Intermediate rose 0.15% to $103.82.
President Donald Trump recently issued an executive order easing certain Russia-related sanctions and tariffs, although uncertainty remains over the administration's final policy direction.
European political unrest added pressure to global financial markets. French authorities imposed curfews in several cities, including Paris, Lille and Nice, following widespread anti-government demonstrations and violent disturbances.
Currency markets remained relatively stable, with the US dollar index hovering near 101.92 and the euro trading around $1.12. Gold slipped 0.51% to $4,118.71 per ounce.
European stock futures also weakened, while US stock futures showed limited movement ahead of corporate earnings announcements.
Cryptocurrencies followed the broader risk-off sentiment, with Bitcoin declining 0.67% to $81,386 and Ethereum falling 0.54% to $2,385.
Investors will now focus on technology earnings, central bank commentary and geopolitical developments for clues about the direction of global stock markets, inflation and interest rates.
