Asian Stocks Rebound as Iran-Israel Pause Strikes; India May Get Higher Opening

Mumbai, June 9: Indian equities are likely to start Tuesday’s session on a firmer note, tracking gains across Asian markets after reports of a halt in attacks between Iran and Israel helped soothe investor nerves, and taking heart from a pullback in oil prices. 

Japan’s Nikkei and South Korean shares led advances in the region as part of a rebound, while broader Asian markets also moved higher as fears of an immediate escalation in the Middle East eased. The pause in hostilities reduced concerns over potential disruptions to energy supplies and global trade routes, encouraging investors to return to risk assets after a volatile start to the week. 

Even so, traders remained cautious, aware that geopolitical risks have not completely disappeared and could quickly return to the forefront if tensions flare up again. 

Oil retreats as geopolitical fears ease 

Crude oil prices slipped about 0.7% in Asian trade after reports of a pause in hostilities between Iran and Israel eased immediate concerns over supply disruptions. While the decline offered some relief to investors after the recent surge in energy prices, Brent crude remained elevated by historical standards as traders continued to assess the durability of the truce and the risk of renewed tensions in the Middle East. 

For India, the pullback in crude prices could temper concerns around inflation and imported energy costs, although sustained volatility in the oil market remains a key risk for fuel-sensitive sectors such as aviation, paints, tyres and oil marketing companies. 

Wall Street ends mixed as chip stocks stabilize 

U.S. stocks finished mixed on Monday as gains in semiconductor shares helped steady sentiment after recent volatility. Chipmakers recovered from last week’s selloff, providing support to the technology-heavy Nasdaq, as investors reassessed concerns over artificial-intelligence spending and sector valuations. 

However, the broader market remained cautious after strong U.S. economic data reinforced expectations that the Federal Reserve could keep interest rates elevated for longer. Dow was down 0.2%. 

Higher Bond Yields Keep Investors on Edge 

A key overhang for global markets remains the rise in U.S. Treasury yields. 

Stronger economic indicators have pushed yields higher, reflecting expectations that policymakers may not be in a hurry to ease monetary policy. Rising yields increase borrowing costs and make fixed-income investments more attractive relative to stocks, creating a headwind for equity markets worldwide. 

The move in bond markets is being closely watched by investors, particularly as inflation risks remain elevated due to higher energy prices. 

European Markets End Lower Amid Cautious Sentiment 

European shares closed lower in the previous session, with the pan-European STOXX 600 index slipping after hitting a two-week low earlier in the session. 

Investors in the region reduced exposure to risk assets amid concerns over Middle East tensions and renewed questions surrounding the sustainability of the technology-driven rally. The weakness in Europe underscored the cautious tone that continues to dominate global markets despite signs of geopolitical relief. 

Positive Start Likely for India, But Risks Remain 

Stronger Asian markets points to a higher opening for Indian equities. 

However, the sustainability of any gains will likely depend on movements in crude oil prices, developments in the Middle East and the trajectory of global bond yields. While the immediate risk-off mood has eased, investors are expected to remain selective as they navigate a market environment still shaped by geopolitical uncertainty and central bank concerns. 

Source

• Exchanges