Investing.com-- Most Asian stocks rose on Thursday, recovering a measure of steep losses clocked over the past two sessions, although sentiment still remained fragile after a devastating earthquake in Taiwan. 

Mixed cues on U.S. interest rate cuts also limited any major upside in regional stocks, especially with more comments from Federal Reserve officials and key nonfarm payrolls data lined up in the coming days.

Still, Asian markets took some positive cues from a mildly stronger overnight close on Wall Street. U.S. stock index futures also rose in Asian trade.

Trading volumes in Asian markets were somewhat muted on account of market holidays in China and Hong Kong. 

Japan’s Nikkei 225 rebounds from three straight days of losses

The Nikkei 225 rose 1.5% on Thursday, rebounding back above the 40,000 level after clocking three straight days of losses. The index was pressured by a mix of profit-taking, while signs of higher Japanese inflation also drove up concerns over more hawkish measures from the Bank of Japan. 

The broader TOPIX index rose 1.3%, also rebounding from recent losses.

Persistent weakness in the yen greatly benefited export-oriented Japanese stocks, which were a key driver of the Nikkei’s gains on Thursday. The yen was battered by bets that Japanese interest rates will only rise at a marginal pace, while U.S. interest rates will remain higher for longer. 

Broader Asian markets advanced after also clocking steep losses in the first two trading days of the second quarter. Most regional indexes were hit with some profit-taking after a strong first three months of 2024.

Australia’s ASX 200 index rose 0.5% and remained in sight of record highs, while South Korea’s KOSPI added 1% and was close to a two-year peak.

The Taiwan Weighted index closed 0.6% lower on Wednesday after the island state was hit with its worst earthquake in 25 years. Index heavyweight TSMC (TW:2330) lost 1.3% after it said it was evacuating some factory areas after the earthquake. 

Indian stocks in focus as RBI meeting, elections loom 

Futures for India’s Nifty 50 index pointed to a positive open, with the index remaining well above the closely-watched 22,000 level. 

But sentiment towards India was somewhat on edge before a Reserve Bank meeting on Friday. While the RBI is widely expected to keep rates on hold, any signals on inflation and economic growth will be closely watched.

The RBI meeting also comes just weeks before the 2024 India general elections, where incumbent Prime Minister Narendra Modi will be contesting for a third consecutive term. 

Opinion polls show that an alliance led by Modi’s BJP party is pegged to gain a majority vote- a trend that likely bodes well for Indian stock markets.

Investors have largely welcomed Modi’s business-first policies over his past 10 years of rule. The Indian economy was also the fastest-growing major economy over the past two years- a trend that saw the Nifty clock a series of record highs.