Asian markets experienced a significant turnaround today, bringing a wave of cautious optimism after a challenging Monday that saw billions wiped off market valuations. Investors across the region are hopeful as early indicators suggest a positive opening for India’s domestic indices. The Nifty 50 had its most substantial drop in ten months just a day prior, raising questions about the stability of the market.

GIFT Nifty Indicates Positive Momentum for Indian Stocks

In early trading, the GIFT Nifty surged past 22,600, a notable recovery from Monday’s Nifty 50 close of 22,161.60. The previous day witnessed both the Nifty and Sensex tumble over 3%, driven by significant foreign institutional investor (FII) sell-offs and rising concerns over new tariffs introduced by the U.S. Despite the turmoil, domestic investors stepped in, buying approximately $1.41 billion worth of shares to help stabilize the market after FIIs sold off $1.05 billion in Indian equities.

Asian Markets Rebound After Monday’s Downturn

In a broader context, major Asian indices are working to recover from the shock triggered by the tariff situation. Japan’s Nikkei 225, which experienced a staggering 8% decline on Monday, rebounded by over 5% in early trading. Similarly, South Korea’s Kospi climbed nearly 2%, and Australia’s ASX 200 saw an increase of 1%. This recovery was largely fueled by gains in the banking and mining sectors, following reassuring statements from Treasurer Jim Chalmers.

Mixed Results for Taiwan and Hong Kong Markets

However, not all markets enjoyed a rebound. Taiwan’s Taiex index continued its downward spiral, dropping an additional 5% after a 10% fall the previous day. Conversely, Hong Kong’s Hang Seng index managed to rise by 1.66%, although the Shanghai Composite dipped slightly, reflecting ongoing uncertainties surrounding the escalating U.S.-China trade tensions.

Tariff Concerns Persist

The recent sell-off was primarily triggered by U.S. President Donald Trump’s announcement of sweeping new tariffs, which prompted retaliatory measures from Beijing. Trump has threatened to impose an additional 50% duty, while China’s commerce ministry has committed to retaliating “until the end,” keeping market participants on edge.

Attention Shifts to RBI’s Upcoming Decision

Back in India, investors are now closely monitoring the Reserve Bank of India (RBI), which is anticipated to announce a 25 basis points interest rate cut on Wednesday. This decision could provide much-needed support to the markets amid the prevailing volatility.

As Asia works to recover from recent shocks, the focus remains on global trade dynamics and domestic monetary policy, which will play a crucial role in shaping market sentiments in the coming days.