By Ankur Banerjee
SINGAPORE, Oct 9 (Reuters) - Asian stocks were poised on Friday for a second straight weekly drop, as investors fretted about higher energy prices, bond market ructions and the huge sums needed to fund AI investment.
Brent crude futures dipped 1.2% to $103.05 per barrel after surging more than 4% in the previous session on concerns over the Middle East war that has fanned inflation worries and led to higher rates across the globe.
In equities, MSCI's broadest index of Asia-Pacific
shares outside Japan was set for a drop of nearly 1% on the week, although it was up 0.5% on the day in thin liquidity, as markets in South Korea and Taiwan shut for a holiday.
Japan's Nikkei dipped 0.25%, while European futures pointed to a higher open. Nasdaq futures rose 0.5% after tech stocks led Wall Street's main indexes lower overnight.
Much of Friday's market focus was on OpenAI, after media gave an idea of the money the ChatGPT owner is making.
Reuters reported that OpenAI told investors its annualised September revenue was almost $50 billion, a drop from its earlier signal, although Bloomberg said the firm could reach or exceed $70 billion by year-end, helping to lift stocks.
"The price action suggests investors are becoming more selective about where they want exposure and, importantly, what price they are prepared to pay for future growth," said Chris Weston, head of research at Pepperstone.
On Thursday, President Donald Trump said the US would not launch an attack on Iran before midterm elections in November, but traders stayed sceptical of progress towards ending the war.
"The big question for markets is whether Trump sticks to his word if Iranian attacks intensify," said Nick Twidale, chief market strategist at ATFX Global.
"Any indication that the White House is reconsidering military action could see oil prices spike sharply higher, particularly with tanker traffic through the Strait of Hormuz already under significant pressure."
BOND BINGE FOR AI
Investors were also weighing a massive round of fundraising that appeared to be planned, with SpaceX, Broadcom and Oracle all expected to raise billions to buy high-end AI chips.
Australian data centre operator Firmus, backed by Nvidia, shelved its $5-billion initial public offering, citing market volatility and conditions, and said it would opt for a private fundraising round instead.
A toxic mix of higher energy costs, expectations of central bank interest rate hikes and concerns over rising government debt have fuelled a months-long global bond selloff, pushing up borrowing costs.
"With long-term yields back around multi-decade highs, investors no longer have the luxury of valuing AI growth in a low-cost-of-capital world," said Charu Chanana, chief investment strategist at Saxo.
Higher sovereign yields, and now rising corporate issuance to fund AI infrastructure mean capital is becoming "both more expensive and more selective, which puts balance sheets and the quality of future earnings firmly in focus," Chanana said.
FOCUS ON FRANCE
France has been hit particularly hard as investors scrutinise its debt load, budget deficit and political outlook ahead of the 2027 presidential election.
"The scale of the fiscal adjustment required in France is large but manageable," ANZ analysts said in a note, adding that the fractured political landscape poses a greater challenge, however.
"Until a clearer political consensus forms, market pressures are likely to remain."
US Treasury markets have been calmer as solid auctions this week helped the mood. The benchmark 10-year yield was steady at 5.226% but held close to the 24-year high of 5.364% hit on Wednesday. [US/]
Among currencies, the dollar stood tall as the euro was set for a fifth straight week in the red at $1.123, straddling a 17-month low touched this week on French debt worries. [FRX/]
(Reporting by Ankur Banerjee in Singapore; Editing by Jamie Freed and Clarence Fernandez)
