Markets Mostly Rise as Traders Try to Look Beyond Rate Hikes

Most stock markets rose Friday, reversing early losses and a sell-off on Wall Street, as traders consider further interest rate hikes by central banks struggling to tame inflation.

With officials from the United States to Switzerland warning that more tightening will be needed, the Bank of Japan stood firm on its ultra-loose monetary policy, refusing to give in to calls for a shift to normalization.

In a sign that the effects of inflation will linger for some time, central banks in Sweden, Norway and Switzerland all warned they would likely have to hike again at some point owing to sticky inflation.

Analysts expect the US Fed to hike rates one last time to avoid a reacceleration of inflation. Severalpolicymakers have said they were confident the United States can avoid recession even as they push rates to two-decade highs.

The prospect of borrowing costs staying higher for longer jolted Wall Street with all three main indexes ending more than one percent down.

But after a rocky start Asia enjoyed a broadly positive day. Hong Kong and Shanghai jumped more than a percentage point, with analysts saying traders were readying themselves for the possibility of more stimulus measures out of China.

Sydney, Singapore, Mumbai, Bangkok, Taipei, Jakarta, Manila and Wellington also started on positive terms, though Tokyo and Seoul were in the red. London Paris and Frankfurt also fell briefly at the opening of markets.