Asian Rally Led By Tech Optimism Signals Firm Start For Indian Markets

Mumbai, May 21:Indian equities are poised for a positive start on Thursday, tracking a broad-based rally across Asian, American and European markets after strong gains in global technology stocks and hopes that tensions in the Middle East may not spiral further.

Asia Advances

Asian markets advanced sharply, with Japan’s Nikkei rising 3.6% and South Korea’s Kospi surging 7.29%, as investors returned to riskier assets following a strong overnight session on Wall Street. MSCI’s broadest index of Asia-Pacific shares outside Japan also gained 2.53%, helped by renewed optimism around artificial intelligence-driven demand and semiconductor stocks. Hong Kong’s Hang Seng edged up 0.14%.

Technology shares led the rally after chipmaker Nvidia’s earnings, which are widely seen as a barometer for the strength of the global AI boom. Samsung Electronics climbed over 6% after reaching a tentative wage agreement that averted a major strike, further boosting sentiment across Asian technology counters.

Wall Street Rebounds on Chip Optimism

U.S. markets closed sharply higher overnight, with the Nasdaq jumping 1.5% and the S&P 500 gaining 1.1%, as investors bought into chip and AI-linked stocks after recent volatility. Market participants were also encouraged by signs that geopolitical tensions involving Iran may not intensify immediately, easing fears of a prolonged supply shock in global energy markets.

The rally in U.S. equities spilled over into Europe, where the pan-European STOXX 600 index rose 1.5% to hit a near two-week high. Semiconductor and technology-linked companies were among the biggest gainers, with Dutch chip equipment maker ASML climbing nearly 7%.

European investors also found comfort in improving global risk appetite and expectations that demand for AI infrastructure and high-end chips would remain resilient despite concerns around global growth and elevated interest rates.

Oil Rebound Remains Key Risk for India

Despite the improvement in risk sentiment, crude oil prices remained volatile. Oil rebounded on Thursday after falling in the previous session, as uncertainty persisted over the prospects of a lasting peace arrangement involving Iran and concerns lingered around potential disruptions to oil supply routes.

Brent crude continued to trade above the $100-per-barrel mark, keeping inflationary worries alive for large oil-importing economies such as India.

For Indian markets, elevated crude prices remain a critical risk factor as they can pressure the rupee, increase imported inflation and weigh on sectors such as aviation, paints and oil marketing companies. At the same time, energy producers and upstream oil companies could benefit from higher realizations.

Indian Markets Seen Opening Higher

Against this backdrop, Indian benchmark indices are likely to open on a firm note, supported by positive global cues and strength in technology shares. IT stocks may remain in focus while energy stocks could stay active amid swings in crude oil prices.

However, volatility could remain as investors continue to track developments in the Middle East, movement in bond yields and global commodity prices.

Source:

• Exchanges