Bangkok, Dec 13 (AP) Asian shares were mostly higher on Tuesday as the Federal Reserve and other central banks prepared for the year's final barrage of interest rate hikes.

Tokyo's Nikkei 225 rose 0.3 per cent to 27,925.38 while the Hang Seng in Hong Kong gained 0.6 per cent to 19,572.66. Australia's S&P/ASX 200 edged 0.2 per cent higher to 7,195.00.

Also Read | US: Famed Hollywood Mountain Lion Captured by Wildlife Officials After Killing Dog in California.

In Seoul, the Kospi edged 0.1 per cent lower to 2,370.55. The Shanghai Composite index lost 0.2 per cent to 3,172.36. Shares fell in India and Taiwan but rose in Singapore and Bangkok.

Markets have struggled this year thanks to high inflation and the interest rate hikes engineered to combat it. Higher rates slow business activity by design but also risk causing a recession if they go too high, all while dragging down prices of investments.

Also Read | Samuel Bankman-Fried, Founder of FTX, Arrested in Bahamas at US Government’s Request.

On Wall Street on Monday, the S&P 500 rallied 1.4 per cent to 3,990.56. The Dow Jones Industrial Average added 1.6 per cent to 34,005.04. The Nasdaq climbed 1.3 per cent to 11,143.74. The Russell 2000 gained 1.2 per cent to 1,818.61.

The indexes were coming off their first weekly loss in three weeks.

Technology stocks accounted for a big share of the market's gains. Microsoft rose 2.9 per cent and was the biggest single force lifting the S&P 500. The London Stock Exchange Group agreed to a 10-year deal where it will move data to Microsoft's cloud and spend at least USD 2.8 billion. Microsoft is also taking a 4 per cent ownership stake in the company.

Horizon Therapeutics jumped 15.5 per cent after Amgen announced it would acquire the biopharmaceutical company for about USD 26.4 billion.

The rally came ahead of a key inflation report on Tuesday and a meeting of policymakers at the Federal Reserve, after which investors expect the Fed to announce Wednesday its last rate hike of the year following a blitzkrieg that began in March.

The Fed has hinted it will dial down the size of its rate hikes, leading to expectations for a more modest increase of 0.50 percentage points Wednesday.

That would follow four straight mega-hikes of 0.75 percentage points. Each was triple the Fed's usual move, and they lifted the central bank's key overnight rate to a range of 3.75 per cent to 4 per cent after starting the year at virtually zero.

Other central banks around the world are also likely to raise their own rates by half a percentage point this week, including the European Central Bank.

Economists at Goldman Sachs expect Fed policy makers on Wednesday to signal their median expectation is for rates eventually to hit a range of 5 per cent to 5.25 per cent.

Even if inflation is waning, the global economy still faces threats from the rate increases already pushed through. The housing industry and other businesses that rely on low interest rates have shown particular weakness, and worries are rising about the strength of corporate profits broadly.

The next big milestone for markets comes later Tuesday with the release of the latest update on inflation at the consumer level. Economists have forecast that inflation slowed to 7.3 per cent last month from 7.7 per cent in October.

Besides raising short-term rates, the Fed is also making other moves with its vast trove of bond investments that should effectively allow longer-term yields to rise.

The yield on the 10-year Treasury, which helps set rates for mortgages and other loans, rose to 3.61 per cent from 3.59 per cent late Friday. The two-year yield, which tends to more closely track expectations for the Fed, rose to 4.39 per cent from 4.34 per cent.

Energy producers rose Monday after the price of US oil settled 3 per cent higher. Exxon Mobil rose 2.5 per cent.

US benchmark crude added 73 cents to USD 73.90 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the basis for pricing for international trading, picked up 93 cents to USD 78.92 per barrel.

Last week, crude prices scraped their lowest levels of the year on worries about a weakening global economy, which would mean less demand for energy. (AP)

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)