HONG KONG, Feb 10, 2022 (BSS/AFP) - Asian investors moved tentatively on
Thursday as they jostle ahead of the release of US inflation data later in
the day that could have a huge bearing on the Federal Reserve's rate hike
plans.

   A broadly positive week for global equities continued on Wednesday thanks
to some healthy earnings results, the further reopening of economies and
signs of an easing in Russia-Ukraine tensions.

   While the mood for now is positive, nerves are on edge as the US consumer
price index figures come up for release.

   Commentators warn that a reading above the forecast 7.2 percent -- which
would be a new four-decade high -- would pressure the Fed to act more
aggressively to rein in prices.

   Some Fed officials on Wednesday said policymakers would make their
decisions based on data coming across their desks, with a 50 basis point hike
-- as opposed to the usual 25 basis points -- was not off the table just yet.

   Surging inflation and bets that the US central bank will end its pandemic-
era cheap cash policies have weighed on world markets in recent months,
stalling a two-year rally that saw them hit record or multi-year highs.

   But there is a feeling in some quarters that investors may be getting used
to the prospect of higher borrowing costs, while still strong economic data
and the easing of containment measures will continue to support company
earnings.

   "While uncertainty remains as to the course of inflation, particularly
wages, and interest rates in the months ahead given the planned tightening by
the Fed is essentially new ground... historically economies have grown in
much higher interest rate environments," said markets strategist Louis
Navellier.

   "Why is the market rallying when we're about to get hit with that horrible
inflation news tomorrow? In a word: earnings. They're much better than anyone
anticipated. So the surprises are huge and the guidance, by and large, is
great."

   All three main indexes on Wall Street chalked up strong gains Wednesday,
while London, Paris and Frankfurt piled on more than one percent apiece.

   But Asia struggled to build on its own rally, with regional markets
fluctuating in the morning.

   Tokyo, Shanghai, Sydney, Wellington, Taipei and Jakarta rose but Hong
Kong, Singapore, Seoul and Manila were in the red.

   There is a general consensus that the outlook for the global economy is
positive and markets will recover as inflation is brought under control
thanks to easing supply snarls but some observers remain cautious.

   "The market is being somewhat sanguine about what will happen in the
second half of 2022," Sonal Desai, of Franklin Templeton Fixed Income, said.

   "There is an expectation that inflation will decline sharply. I think that
might be optimistic because a lot of the factors driving inflation will still
be with us. The Fed is already behind the curve."

   Still, concerns over the stand-off between Russia and Ukraine appeared to
be easing after French President Emmanuel Macron said Russian counterpart
Vladimir Putin had told him that Moscow "would not be the source of an
escalation".

   While the West accuses Russia of having massed 100,000 soldiers near
Ukraine's borders, Kyiv's Foreign Minister Dmytro Kuleba said "diplomacy is
continuing to lower tensions".

   Meanwhile, Kremlin spokesman Dmitry Peskov said "there were positive
signals that a solution to Ukraine could be based only on fulfilling the
Minsk agreements", which ended the worst of the fighting in 2014 between
Ukraine and Russian-backed separatists.

   Signs of progress on the diplomatic front in Eastern Europe have kept a
cap on oil prices in recent days, as has the possibility of a revived Iran
nuclear deal, which could see Tehran resume worldwide exports and ease supply
problems.

   Both main contracts were slightly lower Thursday, having rallied this year
to their highest levels since 2014.

   - Key figures around 0230 GMT -

   Tokyo - Nikkei 225: UP 0.1 percent at 27,598.11 (break)

   Hong Kong - Hang Seng Index: DOWN 0.2 percent at 24,780.00

   Shanghai - Composite: UP 0.1 percent at 3,484.26

   Euro/dollar: DOWN at $1.1423 from $1.1425 late Wednesday

   Pound/dollar: DOWN at $1.3533 from $1.3535

   Euro/pound: UP at 84.42 pence from 84.40 pence Dollar/yen: UP at 115.54
from 115.52 yen

   West Texas Intermediate: DOWN 0.2 percent at $89.47

   Brent North Sea crude: DOWN 0.3 percent at $91.28 per barrel

   New York - Dow: UP 0.9 percent at 35,768.06 (close) London - FTSE 100: UP
1.0 percent at 7,643.42 (close)