HONG KONG: Asian markets mostly rose Tuesday, fuelled by growing hope that vaccine rollouts will allow the global economy to get back on track, but the optimism was tempered by niggling worries that the recovery will fan inflation and interest rate hikes. With governments picking up the pace in their coronavirus inoculation drives, and infection and death rates slowing in most parts of the world, observers are predicting a surge in economic activity from the middle of the year as lockdowns are eased. Added to that is Joe US President Biden’s huge growth-boosting spending programme, which is likely to be passed by Congress next month, on top of the Federal Reserve’s pledge to keep monetary policy ultra-loose for as long as needed. Monumental government and central bank support worth trillions of dollars has been a key driver of the surge in world equities from their nadir almost a year ago when the coronavirus was rampaging across the planet. But while the mood is increasingly good, investors are turning their focus to the impact of the reflation — a rally in prices as people go back to shops and restaurants or start going on holiday again. Expectations that inflation will spike has seen US 10-year Treasury yields rally to a one-year high, and that has spooked investors who fear that means interest rates will go up in turn. Technology firms, which have outperformed as they benefit from people being forced to stay home, have been worst hit, while those likely to do well as economies reopen are enjoying much-needed buying interest. “Investors are quickly rediscovering that not all stocks are created equal in a Covid recovery as expensive tech names (are sold) to provide the source of funds for less expensive travel-related markers, along with energy and other inflation beneficiaries,” said Axi strategist Stephen Innes.