Asian stocks rose as talks between Russia and Ukraine boosted sentiment

BEIJING (Reuters) – Asian stocks rose on Thursday, tracking Wall Street gains as planned diplomatic talks between Russia and Ukraine boosted risk sentiment, although analysts warned the rally could be subject to a sharp decline.

Oil prices also regained some ground, having fallen more than 12% in the previous session as the market weighed whether major producers would boost supplies to help plug the production gap from Russia due to sanctions over its invasion of Ukraine.

MSCI’s broadest index of Asia Pacific shares outside Japan (MIAPJ0000PUS.) Gained 1.6% off the lowest level since November 2020. Japan’s Nikkei (.N225) It rose 3.8%, the largest rise in nearly 21 months.

Chinese blue chips (.CSI300) Hong Kong’s Hang Seng Index is up 1.75% (.HSI) It was up 0.6%.

In Europe, stock futures are pointing to a stronger open. The Euro Stoxx 50 Index is up 0.35%, although German DAX futures are up 0.55% and FTSE futures are up 0.48% in early trades.

Wall Street futures were slightly lower. S&P 500 futures were down 0.13% and Nasdaq futures were down 0.21%.

Traders and investors are now awaiting the European Central Bank meeting later in the day for any clues as to how the Russian invasion of Ukraine will affect monetary policy in the region. US inflation figures are due, which could guide expectations for next week’s Federal Reserve meeting.

Mansur Muhyiddin, chief economist at Bank of Singapore, said financial markets had rebounded on the hope that Ukraine and Russia might start negotiating more seriously over their differences.

“However, the reaction is unlikely to be sustainable as significant differences remain between the two countries, and the military conflict appears to be on the verge of intensifying as Russia aims to capture major cities in Ukraine.”

Russian Foreign Minister Sergei Lavrov arrived in Turkey ahead of scheduled talks on Thursday with his Ukrainian counterpart Dmytro Kuleba, in what would be the first meeting between the two countries since Russia’s invasion of Ukraine two weeks ago. Read more

Adding to the uncertainty, Russia on Wednesday accused the United States of declaring an economic war on the country, and drew Washington’s attention as it was considering its response to the Russian oil and energy embargo. Read more

A draft declaration on Thursday showed that European Union leaders will gradually stop buying Russian oil, gas and coal, as the union seeks to reduce its dependence on Russian energy sources, following a ban from the United States. Read more

Brent crude futures rose 3% on Thursday, at $114.64 a barrel, and US crude rose 1.73% to $110.58 a barrel, after UAE Energy Minister Suhail Al Mazrouei said his country is committed to the existing agreement between OPEC countries. Intensify the oil supply.

Previously, prices fell after the UAE ambassador to Washington said his country would encourage OPEC to consider increasing production to fill the supply gap due to sanctions imposed on Russia.

Higher energy prices will boost expectations that the Federal Reserve will raise interest rates by 25 basis points at its policy meeting next week, and data released later today is expected to show US consumer inflation racing at 7.9% annually in February.

“US stocks could be on a halt with higher levels of volatility as investors assess the impact of the conflict in Ukraine on inflation and potential Fed action,” said David Chow, Hong Kong-based global market analyst at Invesco.

US stocks jumped overnight, led by financial and technology stocks. Nasdaq Composite (nineteenth) It added 3.59% while the Dow Jones Industrial Average rose (.DJI) rose 2%.

Amazon.com Inc said Wednesday that its board approved a 20-for-1 split of the e-commerce giant’s common stock and authorized a $10 billion buyback plan, sending the company’s shares up 7% in expanded trading. Read more

In the currency markets, the euro was trading at $1.1054 after jumping 1.6% on Wednesday, its best day since June 2016, along with gains in European stocks and a sell-off in bonds, while the safe-haven yen slipped to a one-month low. . From 116 per dollar.

The dollar index was at 98.144, after falling 1.2% overnight amid a rally in the euro, and, along with the yen, was hurt, along with the yen, by rising sentiment towards riskier assets such as stocks.

Gold was slightly lower, with spot gold slipping 0.6% to $1,977.89 an ounce.

The yield on the benchmark 10-year Treasury fell slightly to 1.9409% compared to its US close of 1.948% on Wednesday.

The two-year yield, which rose as traders expected an increase in the Fed funds rate, touched 1.6638% compared to the US close at 1.678%.

(Additional reporting by Stella Keogh in Beijing and Elon John in Hong Kong; Editing by Sam Holmes and Raju Gopalakrishnan

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