Daily Times

Easing inflation concerns helped push equities higher in Asia on Tuesday, tracking a healthy rally on Wall Street, with traders taking heart from the global economic recovery outlook, while oil prices extended gains as Iran tempered optimism over its nuclear deal.

Bitcoin also held gains after another wild day, thanks to another supportive tweet from tycoon Elon Musk that offset fresh Chinese warnings of a crackdown on cryptocurrencies. Tech firms led the way higher in New York as investors took heart from a number of Federal Reserve officials who insisted that an expected spike in prices over the next few months — caused by issues including supply bottlenecks and just-freed consumers splurging cash — would be temporary. The gains helped chip away at recent losses in the sector, which has taken the brunt of selling owing to concerns that a surge in inflation will force central banks to tighten monetary policy such as hiking interest rates.

Tech giants are more susceptible to higher rates owing to the potential effect on their future earnings and cash flow. “Markets appear to be coming around to the Fed narrative that a burst in inflation is only likely to be temporary and therefore should not be a concern,” said Rodrigo Catril, of National Australia Bank. “A temporary spike in prices should not instigate a removal of stimulatory policies from central banks.” After a mixed day Monday, Asian markets were on a roll.