Asian stock markets advanced at Thursday’s open, extending a global equity rally as investors grew more confident that the United States would continue to strike trade deals after successfully clinching a pact with Japan.
This positive sentiment, which pushed the S&P 500 to a new record high overnight, is setting the stage for a higher opening for Indian benchmarks like the Sensex.
The positive momentum was widespread across the region, with the MSCI Asia-Pacific index rising 1% for its sixth consecutive day of gains – the longest winning streak since January.
The rally in equities reflected a growing conviction among stock bulls that Washington is adopting a more pragmatic approach to its trade policy, a shift that is calming the uncertainty that has plagued markets.
The gains followed reports that the US was closing in on an agreement with the European Union, which would set a 15% tariff for most products, mirroring the accord reached with Japan.
The progress on these trade deals has offered validation for investors who were betting that President Trump would de-escalate global trade tensions before the tariffs could meaningfully impact corporate profits.
Over the past two months, President Trump has struck key agreements, including the pact with Japan and has made progress toward resolving disputes with China, reassuring investors and fueling gains across global markets.
In Tokyo, the Nikkei-225 jumped an impressive 2%, while Japan’s broad-based Topix rose 1.2% to hit a new record high in early Asian trading hours, according to data from LSEG.
In South Korea, the Kospi rose 1.17% at the open, and the Kosdaq Index inched 0.64% higher. This came as South Korea announced that it had avoided a technical recession, with its economy expanding by 0.6% from the previous quarter, a figure that beat economists’ expectations of 0.5% and marked a reversal from the 0.2% contraction seen in the first quarter.
Elsewhere, Australia’s S&P/ASX 200 rose 0.15%. However, mainland China and Hong Kong stocks opened flat amid the sea of green across the region, with both the CSI 300 and the Hang Seng Index showing little movement.
US policy jitters: Powell’s position and dollar’s dip
Despite the equity rally, there were still signs of underlying tension. The US dollar retreated after US Commerce Secretary Howard Lutnick stated that Federal Reserve Chair Jerome Powell “has got to go.”
This comment comes as President Donald Trump is scheduled to visit the Federal Reserve on Thursday, according to the White House, keeping the focus on the strained relationship between the administration and the central bank.
In currency markets, the Japanese yen outperformed all of its Group-of-10 peers as investors speculated that the new trade deal with the US would make a future interest-rate hike by the Bank of Japan more likely.
US Treasuries edged lower for a second day, with the yield on the 10-year note rising almost one basis point to 4.39%. Gold declined 0.1%.
Indian markets: Sensex poised for higher start on trade deal hopes
Indian benchmark indices, the Nifty and Sensex, are set to open higher on Thursday, lifted by optimism surrounding a likely India-UK trade deal that is expected later in the day.
The upbeat mood is further supported by the strong global cues, with Asian markets extending their winning streak and Wall Street edging up on hopes of more US-led trade agreements following the pact with Japan.
Dalal Street had already closed on a strong note on Wednesday, buoyed by the optimism around the US-Japan trade deal and fresh cheer from the impending India-UK free trade pact.
The agreement, which is expected to include tariff cuts on British whisky, cars, and select food items, while granting duty-free access to Indian textiles and EVs, has added to investor confidence and lifted the benchmark indices.
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