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Asian markets mostly rose Tuesday as investors brushed off a reverse on Wall Street and focused on signs of slowing inflation and China's moves to shore up its economy.
While the week got off to a slower start, the mood remains buoyant across trading floors, particularly in Hong Kong, where tech firms led the way.
Still, there remains a lot of trepidation that central bank interest rate hikes aimed at taming inflation will eventually send economies into a recession.
And since Thursday's forecast-beating consumer prices data, Federal Reserve officials have warned there were more increases in the pipeline, though they are not expected to be as big as the previous four 75 basis point rises.
The latest was vice chair Lael Brainard, who said that while it would probably be right to slow down the rate hikes, "we have additional work to do both on raising rates and sustaining restraint to bring inflation down".
The comments, along with profit-taking, helped push Wall Street's three main indexes into the red and pushed the dollar up against its peers, having tumbled last week.
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Stephen Innes at STI Asset Management said: "With US growth yet to fall off a cliff, make no mistake, inflation is still at the fulcrum of market expectations as board members continue to push back a bit on market pricing."
However, Asian traders were a little more upbeat, with dealers cheered by China's move to ease some of its strict Covid-19 restrictions and provide much-needed support to its beleaguered property sector.
Hong Kong rose more than two percent and Shanghai was also in positive territory.
Tokyo, Singapore, Manila, Taipei, Jakarta and Wellington were also up, but Sydney and Seoul dipped.
After a painful year for markets across the planet, there are budding hopes for light at the end of the tunnel.
"It's certainly a time to be thinking about a recovery regime unfolding for markets,” said Kristina Hooper of Invesco.
"But it’s going to take a little time before we know if this really is something of a turning point for inflation and the Fed can be a lot more comfortable about hastening the end of tightening," she told Bloomberg Radio.
Adding to the largely positive mood was a slight easing of China-US tensions after presidents Joe Biden and Xi Jinping held extended talks on the sidelines of the G20 summit in Indonesia.
After the talks, Chinese Foreign Minister Wang Yi described it as a "new starting point" and that they "hope to stop the tumbling of bilateral ties and to stabilise the relationship".
Key figures around 0230 GMT
Tokyo - Nikkei 225: UP 0.1 percent at 27,994.68 (break)
Hong Kong - Hang Seng Index: UP 2.3 percent at 18,031.85
Shanghai - Composite: UP 0.5 percent at 3,100.05
Euro/dollar: DOWN at $1.0326 from $1.0331 on Friday
Pound/dollar: UP at $1.1765 from $1.1751
Dollar/yen: UP at 140.25 yen from 139.90 yen
Euro/pound: DOWN at 87.75 pence from 87.89 pence
West Texas Intermediate: DOWN 0.6 percent at $85.39 per barrel
Brent North Sea crude: DOWN 0.3 percent at $92.91 per barrel
New York - Dow: DOWN 0.6 percent at 33,536.70 (close)
London - FTSE 100: UP 0.9 percent at 7,385.17 (close)
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