Asia, US and Europe Rise, Signalling a Firm Start for Dalal Street; IT Stocks May Lead Gains

Mumbai, June 3: Indian equities are likely to open on a positive note on Wednesday, tracking gains across Asian markets after Wall Street advanced and European shares rose on optimism surrounding artificial intelligence-led demand and the semiconductor sector.

Asian stocks advanced in early trade with Japan’s Nikkei jumping 2.6%, South Korea’s Kospi up 0.15%, the MSCI Asia Pacific ex-Japan index edging 0.3% higher, and Taiwan’s Taiex rising 1.8% as investors took cues from the overnight performance on Wall Street, where major U.S. indices advanced despite concerns around geopolitical tensions and higher oil prices. The positive mood reflected investors’ willingness to look beyond near-term risks and focus on resilient economic growth and corporate earnings. Hong Kong’s Hang Seng, however, declined 1.5%.

The supportive global setup comes after Indian markets ended higher in the previous session, with investors now looking to overseas cues for direction.

Wall Street aided by AI and chip stocks

U.S. stocks closed modestly higher on Tuesday with technology and semiconductor stocks being the biggest drivers. Investor sentiment received a boost after Hewlett Packard Enterprise delivered strong results and highlighted robust demand for AI infrastructure. The upbeat outlook triggered buying across the broader technology space, helping the Philadelphia Semiconductor Index surge nearly 6%.

The movement underscored the market’s continued confidence in AI-related spending, a theme that has supported global technology stocks over the past year.

For Indian investors, the strength in U.S. technology counters could translate into positive sentiment for export-oriented IT companies such as Infosys, Tata Consultancy Services, HCLTech, Wipro and Tech Mahindra, which derive a significant portion of their revenue from North America.

Europe rises

European equities also ended higher, with the pan-European STOXX 600 index rising about 0.7%.

Technology stocks led the gains after semiconductor manufacturer STMicroelectronics raised its forecast for data-centre-related revenue, reinforcing expectations of sustained AI-driven demand. The upbeat outlook sparked gains across the European chip ecosystem, with companies such as Infineon Technologies and Schneider Electric also advancing.

The movement highlighted growing investor confidence that spending on AI infrastructure and data centres will remain strong despite broader economic uncertainties.

What it Means for Indian markets

The combination of advancing Asian markets, and a technology-led advance in Wall Street and Europe points to a firm opening for Indian benchmark indices.

IT stocks are likely to be among the key beneficiaries of the positive global cues. Engineering, capital goods and industrial companies with exposure to global investment trends could also attract buying interest.

However, investors may remain watchful of rising crude oil prices and ongoing tensions in the Middle East. Higher oil prices can increase inflationary pressures and weigh on sectors such as aviation, paints, logistics and other fuel-sensitive industries.

Overall, the global backdrop remains supportive for risk assets, suggesting that Indian markets could start the session on a positive footing, with technology shares expected to play a leading role in driving sentiment.

Source:

• NSE