Asian markets are expected to open cautiously on May 7 as investors await a crucial policy decision from the US Federal Reserve and monitor developments in global trade negotiations.
Market sentiment remains fragile amid mixed economic data from China, volatile currency movements, and ongoing geopolitical tensions in South Asia.
The region’s equities may see range-bound trading with pockets of volatility as traders balance optimism around easing tariffs with concerns over inflation and interest rate trajectories.
On May 6, Asia-Pacific markets ended on a mixed note.
Mainland China’s CSI 300 index rose 1.01% to 3,808.54, buoyed by hopes of improving US-China trade relations after both sides hinted at a more constructive approach to talks.
Hong Kong’s Hang Seng also added 0.7% to close at 22,662.71.
However, China’s Caixin services PMI data tempered enthusiasm, coming in at a seven-month low of 50.7 in April, down from 51.9 in March, signaling a slowdown in the services sector.
Japanese and South Korean markets remained closed on Monday due to public holidays and will resume trading on Tuesday.
Their return could inject additional momentum — or volatility — depending on how investors interpret the Fed’s tone and trade signals from Washington and Beijing.
In India, the Nifty 50 closed 0.29% lower on May 6 amid geopolitical concerns involving Pakistan and a spike in India VIX, which signaled rising market uncertainty.
Despite the decline, the index remains technically strong, holding well above its key exponential moving averages (EMAs). Analysts expect the 24,200–24,050 zone to act as immediate support, while the 24,500–24,600 band remains a key resistance level.
A decisive break above this could pave the way for a rally toward 24,800–24,900.
Gift Nifty, which mirrors early signals for Indian markets, traded slightly higher at 24,431.5 (+0.11%) in early Asia trade, suggesting a flat-to-positive opening for May 7. However, global cues may keep gains in check.
Across the West, US markets closed lower overnight, with the Dow Jones Industrial Average shedding over 300 points.
The S&P 500 and Nasdaq Composite also declined, pressured by weak earnings from Tesla and a drop in big tech stocks like Nvidia and Meta.
President Donald Trump’s mixed comments on trade deals added to investor uncertainty, dashing hopes of a breakthrough this week.
Adding to the cautious mood is the strength of the US dollar, which weighs on Asian currencies and could impact export-driven economies like South Korea, Japan, and China when markets fully reopen.
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