Asian stocks mostly rebounded on Thursday, recovering from recent steep losses despite lingering concerns following a powerful earthquake in Taiwan. Mixed signals regarding potential U.S. interest rate cuts tempered any significant gains, with investors awaiting further comments from Federal Reserve officials and key employment data in the coming days.
While Asian markets drew some optimism from a modestly stronger close on Wall Street and rising U.S. stock index futures, trading activity was subdued due to holidays in China and Hong Kong.
Japan's Nikkei 225 surged 1.5% on Thursday, bouncing back above the 40,000 mark following three consecutive days of declines. Profit-taking and fears of heightened inflation in Japan weighed on the index, although the broader TOPIX index also rebounded by 1.3%.
Export-driven Japanese stocks benefited from the yen's weakness, driven by expectations of gradual interest rate hikes in Japan compared to the higher rates anticipated in the U.S.
Across the region, most indexes recovered from losses in the first two trading days of the quarter, with Australia's ASX 200 edging up 0.5% and South Korea's KOSPI gaining 1%.
However, Taiwan's Weighted index slipped 0.6% on Wednesday in the aftermath of the earthquake, with TSMC, a major index constituent, losing 1.3% after announcing evacuation measures at some of its facilities.
Indian markets were in focus ahead of the Reserve Bank's meeting, with futures indicating a positive opening for the Nifty 50 index.
Investors awaited insights on inflation and economic growth amid the upcoming general elections, where Prime Minister Narendra Modi's BJP party was expected to secure a majority, bolstering market sentiment due to confidence in Modi's pro-business policies and India's robust economic performance in recent years.
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