Asian Markets Rise On Tech Gains; Higher Start Seen For India But Oil Rise May Cap Gains

Mumbai, July 22: Asian equities advanced on Wednesday, taking cues from a rebound on Wall Street and a strong rally in semiconductor stocks, although a fresh rise in crude oil prices amid renewed U.S.-Iran tensions could temper gains in Indian markets. 

Asia Advances 

The MSCI Asia-Pacific index excluding Japan rose 1.2%, while South Korea’s Kospi surged more than 5% and Japan’s Nikkei 225 climbed 1.9%. Technology stocks led the advance after strong semiconductor export data from South Korea and encouraging trade figures from Taiwan revived optimism around the global chip cycle. The gains also followed a recovery in U.S. technology shares, helping investors look beyond lingering concerns over stretched valuations in artificial intelligence-related stocks.  

The positive Asian cues suggest Indian benchmark indices could see a firm-to-positive opening on Wednesday. However, the sustainability of the rally could depend on movements in crude oil, foreign fund flows and the evolving geopolitical situation in the Middle East. 

Oil prices rose again on Wednesday after the United States announced a new round of strikes on Iran, reviving concerns about supply disruptions. Brent crude was at $92 a barrel, adding to the inflationary pressure facing oil-importing economies. The rise in crude could weigh on sentiment in India, which imports a substantial portion of its energy requirements, and could limit the upside in sectors sensitive to fuel costs.  

The oil market has remained particularly volatile as investors weigh conflicting signals on the prospects of a ceasefire. While hopes of renewed diplomacy between Washington and Tehran had earlier pushed crude lower and supported risk appetite, concerns over fresh military action and threats to shipping routes have kept a geopolitical premium embedded in prices. The renewed conflict is also raising concerns about a broader stagflationary shock, with higher energy costs potentially pushing up inflation while weighing on economic growth.  

Wall Street Rebound Offers Support 

U.S. markets provided a more constructive lead for global equities, with technology stocks recovering and investors shifting their focus towards corporate earnings. Dow was up 0.74%, S&P 500 rose 0.89%, and Nasdaq jumped 1.29%. The rebound in semiconductor shares was particularly supportive, helping lift risk appetite ahead of results from major companies including Alphabet and and chipmakers Intel and Texas Instruments . 

The U.S. dollar remained firm while Treasury yields edged higher, reflecting continued caution around inflation and interest-rate expectations. Higher oil prices could further complicate the outlook for central banks if energy costs begin to feed into broader inflation.  

European Shares End Higher 

European equities also traded with a positive bias as tech and mining shares offset concerns over oil and the geopolitical backdrop. However, the region remains vulnerable to renewed energy-price pressures, particularly if the conflict disrupts global oil and gas supplies for an extended period. 

The recent rise in oil prices has already revived concerns about inflation, bond yields and the pace of monetary easing. For European markets, the combination of higher energy costs and weaker growth expectations remains a key risk, keeping investors cautious despite the resilience.  

Indian Markets Seen Opening Higher 

Against this backdrop, Indian equities are likely to open on a positive note, tracking gains across Asian markets and the rebound in U.S. technology stocks. The sharp rise in the Kospi and gains in Japan could provide a boost to domestic sentiment. 

However, the rise in crude oil prices could prevent a broad-based rally. Higher energy costs are negative for India’s macroeconomic outlook and could put pressure on oil marketing companies, paints, chemicals, tyres, aviation and other fuel-intensive sectors. Conversely, upstream oil companies and select energy stocks could remain in focus. 

Investors will also track the rupee, foreign institutional flows and developments around the U.S.-Iran conflict. 

Source

• exchanges