Asian Rally Led by Japan’s Record Surge Signals Positive Start for Dalal Street

Mumbai, May 27:Indian benchmark indices are likely to open on a positive note on Wednesday, tracking strong cues from Asian peers and overnight gains on Wall Street, as optimism around artificial intelligence and semiconductor stocks drives global risk appetite.

Asian equities traded firmly higher, led by Japan where the Nikkei scaled fresh record highs after a sharp rally in chip-related counters. Semiconductor heavyweights such as Tokyo Electron and Advantest surged as investors continued to pile into AI-linked stocks following strong momentum in global technology shares.

The broader risk-on sentiment also lifted regional markets across South Korea and Taiwan, with investors largely brushing aside geopolitical worries for the moment. MSCI’s broadest index of Asia-Pacific shares outside Japan gained over 2%, reflecting improving appetite for equities despite lingering tensions in the Middle East.

Wall Street Extends AI-Driven Momentum

The upbeat Asian mood came after another strong session on Wall Street overnight. The Nasdaq and S&P 500 ended at record closing highs, driven by gains in chipmakers and megacap technology stocks. The Philadelphia Semiconductor Index also touched an all-time high, extending the ongoing AI-fuelled rally that has supported global equities in recent months.

Investor sentiment in the US improved after hopes emerged that diplomatic engagement between Washington and Tehran could still continue despite recent military flare-ups. Reports indicating possible backchannel peace efforts helped ease fears of a wider regional conflict, prompting investors to return to risk assets.

Technology shares remained the biggest beneficiaries globally.

Europe Cautious Amid Oil Worries

European markets, however, painted a more cautious picture. Major indices across the region traded largely flat as investors remained worried about the inflationary implications of elevated crude oil prices and uncertainty around further geopolitical escalation.

As of writing this report, oil prices have slipped, trading at $98.3 per barrel.

What it Means for Indian Markets

Overall, the combination of record highs in Japan and the US, coupled with strong momentum in global technology shares, points to a firm start for Indian equities. Still, traders are likely to remain watchful of crude oil movements, foreign institutional investor activity and fresh geopolitical developments for clearer direction through the session.

Source:

• Exchanges