Asian stock markets experienced a notable recovery on Friday, buoyed by a decline in U.S. Treasury yields that alleviated investor concerns over rising interest rates. This positive shift followed a week of volatility due to global fiscal uncertainties.
In India, the NSE Nifty 50 rose by 0.99% to close at 24,853.15, while the BSE Sensex gained 0.95%, ending at 81,721.08. These gains helped offset earlier weekly losses, with both indices down approximately 0.7% over the week. The rally was supported by strong performances in the FMCG sector, particularly ITC, which reported robust March-quarter earnings.
The Indian rupee also strengthened, marking its largest single-day gain in over two years. This appreciation was influenced by gains in other Asian currencies, including the Chinese yuan and Korean won. However, traders remain cautious about the rupee's sustainability due to recent capital outflows and hedging activities.
Across Asia, markets mirrored this positive trend. Japan's Nikkei 225 and TOPIX indices each climbed 0.8%, despite stronger-than-expected inflation data. Hong Kong's Hang Seng Index rose by 0.5%, contributing to a 1.1% weekly gain. China's Shanghai Composite and CSI 300 indices also posted weekly gains, benefiting from optimism over easing trade tensions.
The easing of U.S. Treasury yields played a significant role in this regional upturn. The 10-year yield dropped to 4.52%, down from earlier highs, as concerns over the U.S. government's fiscal policies and rising debt levels prompted a reassessment of interest rate expectations.
Despite the day's gains, analysts advise caution. While the immediate pressure from rising yields has subsided, underlying concerns about global fiscal stability and potential policy shifts remain. Investors are encouraged to monitor developments closely and consider sector-specific strategies soon.
