Markets rally in early trade amid firm trend in Asian peers, optimism around US-China trade talks
June 10, 2025 | Business & Markets
Global equity markets opened on a buoyant note Tuesday as investors cheered strong cues from Asian markets and growing optimism over progress in U.S.–China trade negotiations. The positive sentiment spilled over into Indian and European markets, lifting investor confidence and triggering broad-based buying in equities.
Asia Leads the Way
Asian markets set the tone early in the day, with major indices posting notable gains. Japan’s Nikkei 225 climbed 1.2%, Hong Kong’s Hang Seng surged over 1.5%, and South Korea’s Kospi added nearly 1%, driven by hopes of a breakthrough in the ongoing U.S.–China trade talks held in London.
Investors welcomed the possibility of de-escalation in trade tensions between the world’s two largest economies. Market watchers said the meetings between top U.S. and Chinese trade representatives have focused on critical issues like semiconductor exports, rare-earth access, and tariff rollbacks — all key flashpoints in their years-long trade rivalry.
The upbeat sentiment was further reinforced by encouraging data from China, where recent export numbers showed resilience, and Japan, which reported modest GDP growth in Q1, exceeding market expectations.
Indian Markets Mirror Global Mood
In sync with global peers, Indian equity benchmarks opened higher on Tuesday. The BSE Sensex gained nearly 250 points in early trade, while the Nifty 50 rose above the 23,300 mark, driven by gains in IT, metal, and capital goods stocks.
The rally was supported by healthy foreign institutional investor (FII) inflows and a stable domestic macroeconomic backdrop. The Reserve Bank of India’s recent policy decision to maintain a dovish stance and continue liquidity support has also underpinned investor confidence.
Among sectoral indices, the Nifty IT index was the standout performer, rising over 1.5%, led by gains in TCS, Infosys, and HCLTech. The Nifty Metal index also witnessed strong traction, supported by hopes of stronger Chinese demand amid trade progress.
Stocks such as ITD Cementation surged over 8% following news of a major contract win worth ₹893 crore, while Jana Small Finance Bank climbed nearly 4% on its announcement of plans to transition into a universal bank — a move analysts say could unlock new growth opportunities.
However, banking stocks saw mild profit-taking after Monday’s gains. HDFC Bank, ICICI Bank, and Axis Bank slipped marginally, reflecting investor caution ahead of key U.S. inflation data due later this week.
Wall Street Sets Up Cautious Optimism
Overnight, U.S. markets ended with modest gains. The S&P 500 closed 0.3% higher, the Nasdaq Composite added 0.5%, while the Dow Jones Industrial Average finished flat. The modest rally followed a better-than-expected U.S. non-farm payroll report, which signaled labor market strength while still allowing room for the Federal Reserve to consider easing its policy stance later this year.
Futures tied to major U.S. indices remained in positive territory ahead of the May Consumer Price Index (CPI) data, which is expected to offer critical insight into the direction of inflation and future interest rate decisions by the Fed.
Investors are walking a tightrope — hopeful that inflation data won’t surprise to the upside, which could prompt the Fed to remain hawkish. At the same time, trade optimism and corporate earnings have provided a cushion, keeping broader sentiment stable.
US-China Talks Back in Focus
The renewed trade discussions between the U.S. and China have emerged as a fresh catalyst for global markets. After years of tensions, including tariffs, sanctions, and export restrictions, the fact that both sides are re-engaging in meaningful talks has boosted risk appetite across regions.
Reports from London suggest that negotiators are focusing on specific areas of cooperation, including relaxing some export controls on semiconductors, streamlining licensing for rare-earth minerals, and revisiting mutual tariffs imposed during previous rounds of trade wars.
While no breakthrough agreements have been announced yet, the mere continuation of dialogue is seen as a major step forward. Analysts believe a more stable trade relationship could significantly benefit global supply chains and reduce market volatility in sectors like technology, manufacturing, and metals.
Investor Outlook: Cautiously Positive
While the overall tone remains constructive, analysts caution that markets could remain volatile ahead of U.S. CPI data and the Federal Reserve’s policy meeting next week. Any negative surprise on inflation or a hardline Fed stance could dent the current rally.
That said, improving global growth indicators, easing oil prices, and a resilient corporate earnings outlook have contributed to a broader risk-on sentiment in the equity space.
In India, continued inflows from domestic and foreign investors, a stable currency, and strong corporate fundamentals are likely to keep markets supported. However, valuations remain elevated, and analysts advise selective stock-picking over broad-based buying at current levels.
Conclusion
Markets across the globe have welcomed the improved tone in U.S.–China trade talks and the firm support from Asian equities. While investors remain vigilant over upcoming economic data and policy events, the prevailing mood suggests a willingness to take on risk — at least for now.
If diplomatic momentum continues and inflation trends remain manageable, equities could extend their gains heading into the second half of the year. For now, bulls appear to be in control, riding the wave of optimism that has been missing in recent months.
