Asian stocks rose on Monday, following a mixed performance on Wall Street that saw the S&P 500 close its record-setting week with a slight dip.

The MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.73%, with Japan’s Nikkei adding 0.31%. The Hang Seng index in Hong Kong climbed 1.54% and South Korea’s Kospi rose 0.94%.

Sentiment was buoyed by the strong performance of U.S. markets last week, with the S&P 500 ending its best week since June. Investors remain optimistic about the global economic recovery, fueled by easing COVID-19 restrictions and robust corporate earnings.

However, concerns about rising inflation and the potential for tighter monetary policy from central banks remain. The U.S. Federal Reserve is expected to begin tapering its asset purchases later this year, which could lead to higher interest rates.

“The market is still looking for direction,” said a senior market analyst at a leading brokerage firm in Hong Kong. “While there is optimism about the economic recovery, investors are also watching for signs of inflation and potential policy changes that could impact growth.”

In the currency markets, the Japanese yen weakened slightly against the US dollar, while the Australian and New Zealand dollars gained ground.

Oil prices rose on Monday, driven by tight supply and increasing demand. The U.S. benchmark West Texas Intermediate crude futures gained 0.82% to $78.01 a barrel.

Looking ahead, investors will be closely monitoring the release of economic data, including the U.S. Consumer Price Index (CPI) report, for further insights into inflation and the outlook for interest rate hikes.