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Asian equity markets staged a strong recovery on Monday, November 9, following last week's sharp technology-led sell-off. Japan's Nikkei 225 advanced approximately 3.4%, while Taiwan's Taiex surged around 5.7%, supported by renewed buying in semiconductor companies and technology hardware suppliers.

The rebound followed heavy losses across regional markets as investors reassessed valuations of artificial intelligence (AI)-related stocks and concerns about the profitability of large-scale technology investments.

Despite the positive global momentum, Indian benchmarks struggled to sustain their opening gains. The Nifty 50 initially moved above 25,050 before slipping below the 25,000 mark, while the Sensex also reversed its early advance as selling pressure emerged in select heavyweight stocks.

Semiconductor stocks lead Asia's recovery

Technology and semiconductor companies were at the centre of Monday's regional rally. Taiwan's recovery was supported by buying in major chipmakers, including Taiwan Semiconductor Manufacturing Company (TSMC), while Japanese technology and semiconductor equipment stocks also advanced.

South Korea's Kospi gained approximately 1.7%, adding to the broader recovery across Asia.

The rebound followed a difficult week for technology investors, with concerns about rising AI infrastructure spending, stretched valuations and uncertainty over future returns triggering substantial selling. Investors are now reassessing whether the recent correction has created buying opportunities in semiconductor and hardware companies.

However, the recovery does not necessarily indicate that concerns surrounding AI valuations have disappeared. Upcoming corporate earnings and technology-sector guidance will remain important indicators of whether the rebound can continue.

Indian markets reverse early gains

GIFT Nifty indicated a positive opening for domestic equities, trading around 25,062.50 in early pre-market activity. The Nifty 50 subsequently opened at approximately 25,076, while the Sensex began the session higher by around 328 points.

The initial optimism proved difficult to sustain. Both benchmarks moved into negative territory during the morning session, with the Nifty slipping below 25,000 and the Sensex giving up its early gains.

Sectoral performance remained mixed. Banking and pharmaceutical stocks provided some support, while the Nifty IT index faced selling pressure. This divergence suggests that domestic investors are becoming more selective rather than participating uniformly in the global technology rebound.

What should Indian traders watch?

For traders, the immediate focus remains on whether the Nifty can reclaim and sustain the 25,000 level. The performance of banking stocks will be important in determining whether domestic buying can offset weakness in information technology shares.

Global semiconductor stocks, US technology futures and upcoming corporate earnings could influence sentiment across the Indian IT sector. Currency movements, crude oil prices and foreign institutional investor activity will also remain important market indicators.

The key takeaway: The strong recovery in Asian technology markets has improved global sentiment after last week's sell-off, but Indian equities have struggled to maintain their initial gains. The Nifty's ability to regain 25,000 and the relative performance of banking and IT stocks will be important signals for traders assessing the next market move.

Disclaimer: This article is for educational and informational purposes only and does not constitute investment, trading or financial advice. Market prices, interest rates and exchange rates can change rapidly.