London (AFP) - Stock markets advanced and oil prices steadied Tuesday as investors eyed possible progress in talks between Russia and Ukraine aimed at halting military action.
Crude futures had soared more than seven percent Monday on supply worries as European leaders debated banning imports from Russia.
Some members are pushing to ramp up pressure on Russian President Vladimir Putin with more sanctions, though others, including Germany -- which still relies on Moscow's fuel -- have been reluctant to target key sectors.
Adding to the pressure, Saudi Arabia warned that Yemeni rebel attacks on its oil facilities pose a "direct threat" to global supplies, after Red Sea facilities belonging to giant Saudi Aramco were targeted.
"The oil market remains one of the most volatile," noted Walid Koudmani, chief market analyst at XTB.
Soaring oil prices have been a driver of turmoil on world markets in recent weeks as demand surges also as economies reopen from pandemic lockdowns.
That, along with a spike in the cost of other key commodities, such as metals and wheat on the Ukraine conflict, has sent global inflation rocketing and caused central banks to hike interest rates.
There is a growing fear that the global economy could endure a period of stagflation whereby prices soar but growth stalls.
Federal Reserve chair Jerome Powell on Monday indicated the US central bank could lift borrowing costs faster than market expectations to keep a leash on inflation.
"I sense that the Fed might well deliver 50 basis point hikes in both May and June as policymakers recognise it will be tough to get inflation down without higher unemployment," said SPI Asset Management's Stephen Innes.
Regarding the Ukraine war, the Kremlin on Tuesday said it would like negotiations with Kyiv aimed at ending Russia's military action to have more substance.
The two sides are holding negotiations remotely after several rounds of talks between delegations meeting on the border between Belarus and Ukraine.
So far, the talks have yielded little progress, with both sides blaming the other, and none has been at the presidential level.
Ukrainian President Volodymyr Zelensky renewed an offer of direct peace talks with Putin late Monday.
In Asia, Hong Kong's main stocks index finished sharply higher Tuesday, resuming last week's rally sparked by China's pledge to support the country's markets and indicated a tech crackdown was nearing an end.
Key figures around 1200 GMT
London - FTSE 100: UP 0.5 percent at 7,475.81 points
Frankfurt - DAX: UP 0.7 percent at 14,427.54
Paris - CAC 40: UP 0.6 percent at 6,623.82
EURO STOXX 50: UP 0.7 percent at 3,910.49
Brent North Sea crude: UP 0.1 percent at $115.73 per barrel
West Texas Intermediate: FLAT at $109.93 per barrel
Tokyo - Nikkei 225: UP 1.5 percent at 27,224.11 (close)
Hong Kong - Hang Seng Index: UP 3.2 percent at 21,889.28 (close)
Shanghai - Composite: UP 0.2 percent at 3,259.86 (close)
New York - DOW: DOWN 0.6 percent at 34,552.99 (close)
Euro/dollar: DOWN at $1.0998 from $1.1013 Monday
Pound/dollar: UP at $1.3215 from $1.3156
Euro/pound: DOWN at 83.22 pence from 83.67 pence
Dollar/yen: UP at 120.74 yen from 119.47 yen
