Asian markets saw a relative recovery during Wednesday’s session, following a wave of declines in technology stocks over the past few days due to concerns surrounding the Chinese artificial intelligence model DeepSeek R1. This downturn raised questions about the future of sector investments, but it began to subside as shares of major Japanese companies such as Advantest, Tokyo Electron, and SoftBank stabilized, supporting key indices like the Nikkei 225, which gained 0.5%.
The ASX 200 index in Australia posted strong gains of 0.9%, reaching its highest level in nearly two months, driven by weaker-than-expected inflation data. This development reinforced expectations that the Reserve Bank of Australia (RBA) could soon start an interest rate cut cycle, prompting increased investor appetite for riskier assets. However, core inflation remains elevated, which may limit the extent of monetary easing in the long run.
Asian trading volumes declined due to market holidays in major economies, including China, Hong Kong, and South Korea. However, markets found support from a rebound in Wall Street technology stocks, which recovered a significant portion of their recent losses. Meanwhile, U.S. stock index futures showed mixed performance, as investors awaited the Federal Reserve’s interest rate decision, with expectations that the central bank would maintain a hawkish monetary stance.
Investor focus is also shifting towards earnings reports from major corporations such as Microsoft, Tesla, ASML, and Alibaba, which are expected to influence market sentiment. In India, markets continue to face selling pressure, with the Nifty 50 index struggling to recover from a seven-month low. Overall, the future trajectory of Asian markets will depend on how investors react to global monetary policy developments and corporate earnings reports.
