- Euro Stoxx fell 1.7%
- Senior Russian and Ukrainian officials in talks in Turkey
- Analysts say the prospects for peace are slim
- The Nikkei rose 3.8%, the best in nearly 21 months
- Oil prices rise, the euro maintains its gains
LONDON/BEIJING (Reuters) – A stock rally eased on Thursday as analysts warned of further suffering for stocks with no immediate end in sight to the war in Ukraine, even as planned diplomatic talks between Moscow and Kiev gave momentum. More risky bets.
European shares fell 1.7 percent, along with indexes in Germany (.GDAXI) and Britain (.FTSE) It lost 1.9% and 0.9%, respectively, reversing after futures metrics pointed to negligible gains in early trade. car manufacturers (.sxep) It suffered the most, dropping 0.9%.
The foreign ministers of Russia and Ukraine will meet in Turkey on Thursday for the first high-level talks between the two countries since Moscow’s invasion of its neighbor, which Ankara hopes will be a turning point in the conflict. Read more
Register now to get free unlimited access to Reuters.com
Register
The prospect of talks boosted MSCI’s broadest index of Asia Pacific shares outside Japan (MIAPJ0000PUS.) by 1.8% with Tokyo (.N225) Adding 3.9%, its best day since June 2020.
Analysts said gains in Asia, which came after European stocks had their best day in nearly two years on Wednesday, were always subject to a sharp reversal.
“The prospect of peace, and an imminent de-escalation, is really pie in the sky,” said Michael Hewson, chief market analyst at CMC Markets.
“As with any kind of bear market, you always get face-ripping spikes in it, because people are reluctant to be very pessimistic.”
However, the euro also held most of its gains from its strongest daily jump in nearly six years ahead of the European Central Bank meeting that is likely to shed light on the monetary and fiscal bloc’s response to the Russian invasion. Read more
The single currency was last down 0.3% to $1.1046.
Further talks are scheduled with the European Union, with leaders due to hold preliminary discussions at a summit starting Thursday night on a joint investment plan to boost the bloc’s independence in defense and energy.
US inflation figures are due, which could guide expectations for next week’s Federal Reserve meeting.
Wall Street futures fell about 0.5%, after the Standard & Poor’s 500 posted its biggest one-day percentage gain since June 2020 on Wednesday. Read more
“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.
MSCI World Stock Index (.MIWD00000PUS)which measures stocks in 50 countries, was up 0.2%.
oil stations
Oil steadied after dropping more than 12% in the previous session as investors weighed whether major producers would boost supplies to help plug the production gap from Russia sparked by sanctions.
Brent crude futures rose more than 3% on Thursday to $114.64 a barrel, and US crude rose 1.73% to $110.58.
The Kremlin accused the United States, on Wednesday, of declaring an economic war against Russia that spread chaos in energy markets, and informed Washington that it is studying its response to the Russian oil and energy embargo. Read more
A draft declaration on Thursday showed that EU leaders will gradually halt purchases of Russian oil, gas and coal, as the bloc seeks to reduce its dependence on Russian energy sources, following a ban from the United States. Read more
Higher energy prices have fueled expectations that the Federal Reserve will raise interest rates by 25 basis points at its policy meeting next week.
Data released later today is expected to show US consumer inflation racing at an annual rate of 7.9% in February.
The dollar index rose 0.2% to 98.234, after falling 1.2% overnight amid a rally in the euro and stocks.
Register now to get free unlimited access to Reuters.com
Register
Additional reporting by Tom Wilson in London, Stella Que in Beijing and Elon John in Hong Kong; Editing by Sam Holmes, Raju Gopalakrishnan and Raisa Kasulowski
Our criteria: Thomson Reuters Trust Principles.
