SINGAPORE: Asian shares rose on Wednesday on hopes that the pace of global interest rate hikes will soon start to slow, even as disappointing results from tech giants Alphabet and Microsoft stoked fears of a looming recession. MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.89% higher, led by a rebound in Hong Kong and China stocks, while Japan’s Nikkei rose 1.2% to climb above 27,500, its highest level since Sept. 20. The bounce in Asian equities could prove to be short-lived, though. European futures indicated stocks there were set to decline, with Eurostoxx 50 futures down 0.20%, Germany’s DAX futures down 0.02% and FTSE futures down 0.09%, while E-mini futures for the S&P 500 fell 1%, pointing to a weaker opening on Wall Street. On Tuesday, Google-owner Alphabet posted softer-than-expected ad sales after the bell and Microsoft missed expected revenue forecasts, adding to possible early signs of a slowdown in the US economy. Shane Oliver, head of investment strategy and chief economist at AMP Capital, said the rally in Asia is being led by US markets and expectations that the Fed might slow down the pace of rate hikes after another big increase next week. Markets are still bouncing from oversold levels and that has provided a bit of fuel for this rebound, Oliver added, while noting that the underlying issues are unchanged. “Central banks will be raising interest rates and risk of recession is still there.” Economists polled by Reuters once again cut growth forecasts for key economies, with the global economy approaching a recession, while central banks continue to raise borrowing costs in a bid to bring down persistently-high inflation. Traders and economists predict another 75 basis point (bps) increase from the Fed next Wednesday, but the view is growing for a slowing to a half-a-point rise in December. Treasuries rallied sharply overnight, with the yield on benchmark 10-year US government debt down more than 12 bps. It was steady at 4.0837% on Wednesday. In China, the mainland benchmark index jumped 1.6%, while Hong Kong stocks rose 2%, attempting another rebound after Monday’s deep sell-off in Chinese assets by global investors worried about Beijing’s policy direction. President Xi Jinping’s new leadership team, revealed on Sunday, has raised worries that the government will increasingly prioritise the state at the cost of the private sector, and keep tough zero-Covid policies in place well into next year, adding to the grim global outlook. “Markets have a tendency to get ahead of themselves and every so often have a bit of a bounce,” Oliver said. “That’s been the pattern right through this slide that we have seen this year that you have this big fall and periodic, quite sharp bounces.” US economic data on Tuesday showed slowing home price growth and souring consumer confidence, with some signs that the Fed’s aggressive interest rate hikes are starting to cool the labour market. In Australia, inflation raced to a 32-year high last quarter as the cost of home building and gas surged. The surprise added pressure on the central bank to reverse a recent dovish turn, though markets doubt there will be a dramatic shift. The Aussie dollar strengthened to just shy of the previous session’s 2 1/2-week high. Meanwhile, the dollar flirted with a three-week low versus major peers, while sterling hung close to the six-week peak reached on Tuesday after new British Prime Minister Rishi Sunak pledged to lead the country out of an economic crisis. The pound was last trading at $1.1458, down 0.08% on the day, but not far from Tuesday’s high of $1.1500, a level last seen on Sept. 15. The euro slipped 0.13% to $0.9957, after jumping to its highest since Oct. 5 on Tuesday at $0.9995. The European Central Bank is widely expected to go for 75 bps rate hike when it meets Thursday. The Japanese yen weakened 0.10% versus the greenback at 148.09 per dollar. The beaten-down currency had touched a 32-year low at 151.94 on Friday, but retreated after two bouts of suspected Bank of Japan intervention either side of the weekend. Japanese government bonds rallied sharply after the Bank of Japan again said it would increase bond buying operations. Oil prices fell as industry data showed US crude oil stockpiles rose more than expected. Brent crude futures for December fell 72 cents, or 0.8%, to $92.80 a barrel by 0330 GMT, after settling 26 cents higher in the previous session.