Asian markets rose Thursday

Asian markets rose Thursday but optimism over the pace of economic recovery continued to be offset by worries about rising infections across Europe and the continent's vaccine struggles, with inflation concerns casting an ever-present shadow.

After a year-long surge, global equities have run out of steam with expectations of a strong growth rebound stoking fear that prices will soar, forcing central banks to wind in the ultra-low monetary policies that have supported the rally.

And while the stock gains have been boosted by the rollout of inoculations -- particularly in Britain and the United States -- Europe's stuttering launch has been compounded by a jump in new cases that has led to lockdowns and containment measures being reimposed.

That has many observers questioning whether its economy can recover as quickly as previously hoped.

US markets sank again Wednesday, led by a two percent drop in the Nasdaq as technology firms took a further hit from expectations the Federal Reserve will have to lift interest rates earlier than forecast, despite repeated pledges by policymakers that they will not budge.

Adding to the selling in New York were fears Joe Biden will look to hike corporate taxes to pay for his huge economic rescue packages, while a fractious meeting between US and Chinese officials last week indicating relations will not likely improve any time soon.

"When the short term wobbles, investors naturally start to fret about those lingering longer-term concerns," said Axi strategist Stephen Innes.

"They are also hurting sentiment with renewed worries about US tax policy and a realisation that any lingering hope of a reset in US-China trade relations is unwarranted.

"The latter is quite a worrying proposition as the two economic behemoths draw battlegrounds, setting the stage for a real dust-up as the superpowers shift from vying for supply-chain domination to battling it out for global internet technology supremacy."

- 'Oil on the water' -

Still, Asian investors pushed tentative gains in early trade Thursday following recent losses.

Tokyo, Shanghai, Seoul and Sydney were all up healthily, while there were also advances in Singapore, Taipei and Manila.

Hong Kong edged up but investors were keeping a worried eye on the city's already slow vaccine programme after Pfizer/BioNTech shots were halted Wednesday following the discovery of some flawed packaging.

However, tech firms in the city followed their US peers lower and the Hang Seng Index remains in correction territory having fallen 10 percent from its recent high seen in February.

"The reflation trade will have further legs to run," Lale Akoner, at BNY Mellon Investment Management, told Bloomberg TV. But she added: "We do see higher inflationary pressures building, higher interest rates and softer dollar to continue."

Oil prices sank more than one percent a day after soaring seven percent in reaction to a giant container ship getting stuck in the Suez Canal, one of the world's busiest shipping routes.

Crude, which tipped a 14-month high earlier this month, has suffered heavy selling in the past couple of weeks on fears about the impact on demand caused by new European lockdowns.

Innes added the Suez blockage "means increased oil on the water -- either queuing for the canal or diverting around Africa. The extra voyage time is akin to 'filling a pipeline' and should support the very jittery market that has seen the rush for the door over the past five sessions".