March 31, 2023 (MLN): Asian markets rallied on Friday as traders grew optimistic that central banks were near the end of their interest rate hiking cycle.

The recent financial turmoil that has rocked markets seems to be subsiding, allowing traders to refocus on the battle against inflation. While borrowing costs were expected to rise to above five percent by the end of the year, forecasts are now for them to finish just above 4% This has helped to push up equities, which had been under pressure throughout February and March.

Despite warnings from top Fed officials that the bank would need to keep its focus on fighting inflation, traders seemed to be buoyed by the news that the banking system was on safe ground. Boston Fed boss Susan Collins said that recent indicators reinforced her view that there was more work to do to bring inflation down to the two percent target associated with price stability.

Meanwhile, Richmond President Thomas Barkin warned that stepping back from the battle against soaring prices would be foolhardy.

In Asia, Hong Kong led the way with a 1.7% rise, thanks to a rally in tech firms after it emerged that e-commerce giant Alibaba's logistics arm was preparing for a listing in the city. News of the IPO by Cainiao Network Technology comes after Alibaba said it intended to split into six units and go public. Alibaba was up more than four percent.

The improved mood on trading floors was also reflected in the VIX "fear" index dropping below 20 to its lowest point since the start of March.

All three main indexes on Wall Street pushed well up on Thursday, as did European equities following the release of data indicating inflation on the continent was slowing.

Despite concerns about the finance sector, traders seemed optimistic that the battle against inflation was being won, and that markets would continue to perform well in the coming weeks and months.

Copyright Mettis Link News 

Posted on: 2023-03-31T10:20:16+05:00