Asian Stocks Rise as US Indicates Potential Tariff Relief and Federal Reserve Actions
Asian markets experienced a notable upswing on Wednesday, buoyed by US President Donald Trump’s assurance that Federal Reserve Chair Jerome Powell will retain his position. This positive sentiment spilled over into Indian equity markets, with the BSE Sensex surpassing the 80,200 mark and the Nifty50 also making significant gains. The rally was further supported by strong foreign institutional investor (FII) activity and optimism surrounding potential trade agreements between India and the United States.
Indian Markets Surge
The Indian equity benchmarks opened strongly on Wednesday, with the BSE Sensex trading at 80,140.02, reflecting an increase of 544 points or 0.68 percent as of 9:21 AM. Similarly, the Nifty50 index climbed to 24,326.10, up 159 points or 0.66 percent. This upward momentum was largely attributed to continued buying from foreign institutional investors, who recorded net purchases worth Rs 1,290 crore on Tuesday. The positive market sentiment was further fueled by accommodative measures from the Reserve Bank of India and growing optimism regarding potential trade agreements between India and the US. Despite facing global uncertainties and regional instability, Indian markets displayed resilience, prompting experts to advise investors to focus on high-quality large-cap stocks while remaining cautious of potential profit-taking as the markets approach overbought conditions.
Global Market Trends
Asian markets also reflected a positive trend, with Japan’s Nikkei 225 rising by 1.7 percent to reach 34,797.22. Australia’s S&P/ASX 200 saw a 1.6 percent increase, climbing to 7,943.00. South Korea’s Kospi added 1.2 percent, reaching 2,515.19, while Hong Kong’s Hang Seng index gained 1.7 percent, closing at 21,927.92. The Shanghai Composite index remained relatively stable, showing little change at 3,298.33. The global market rally was bolstered by President Trump’s comments regarding Powell’s job security, stating, “I have no intention of firing him.” Additionally, US Treasury Secretary Scott Bessent indicated that the ongoing trade tensions with China are unsustainable, hinting at possible relief from tariffs, which further enhanced investor confidence.
US Market Recovery
US stock markets rebounded sharply on Tuesday, with the S&P 500 climbing 2.5 percent to close at 5,287.76. The Dow Jones Industrial Average surged by 1,106.57 points, finishing at 39,186.98, while the Nasdaq gained 2.7 percent, closing at 16,300.42. This rally was supported by positive corporate earnings reports, including an announcement from Elon Musk regarding a renewed focus on Tesla operations. However, Tesla’s after-hours earnings revealed a drop in profits to $409 million, down from $1.39 billion, falling short of analyst expectations. Analysts have warned that market volatility may persist, particularly as ongoing trade negotiations unfold. The International Monetary Fund (IMF) has also downgraded its global growth forecast from 3.3 percent to 2.8 percent, citing uncertainties related to trade.
Market Stability and Economic Indicators
In bond markets, yields on the 10-year US Treasury note stabilized, decreasing to 4.39 percent from 4.42 percent the previous day. In the energy sector, US crude prices rose by $1.23 to $64.31 per barrel, while Brent crude increased by 44 cents to $67.88. Currency markets saw the US dollar weaken against the yen, trading at 141.85 yen compared to 142.37 yen earlier. Meanwhile, the euro strengthened slightly, rising to 1.1397 dollars from 1.1379. President Trump also indicated a willingness to de-escalate the ongoing trade war with China, suggesting that tariffs would be significantly reduced, stating, “145% is very high, and it won’t be that high.” His remarks reflect a broader strategy to foster better trade relations, emphasizing the necessity for a deal to facilitate continued commerce between the two nations.
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