Equities rose Tuesday as the volatility that has gripped markets since Russia invaded Ukraine eased slightly, though oil extended gains as the United States contemplates releasing some of its reserves to temper prices.
With no let-up in the assault on its neighbour, Russia has been pummelled by a series of widespread and debilitating sanctions that have sent the ruble crashing, hammered its stock market and forced the central bank to more than double interest rates to 20%.
France's finance minister warned Tuesday that the raft of punishments "will bring about the collapse of the Russian economy".
The crisis has also ramped up fears about supplies of crucial commodities from the region including wheat and nickel but particularly crude, just as demand surges owing to economic reopenings.
Talks between Kyiv and Moscow did not appear to yield anything positive, while Vladimir Putin laid out to French President Emmanuel Macron his demands to end the war.
They include "the recognition of Russian sovereignty over Crimea, the demilitarisation and denazification of the Ukrainian state and ensuring its neutral status".
The conflict provides an extra headache for global central banks, who will likely have to recalibrate their plans to tighten monetary policy as they try to support their economies.
Some observers have already eased their expectations for the Federal Reserve's timetable of interest rate hikes. While this month is still tipped to see the first, few now forecast a big move.
Markets analyst Louis Navellier said a drop in Treasury yields "seems to reflect the belief that the US Fed will choose to lighten up their resolve to raise rates and plans to start running off their balance sheet until the impact of the battle in Ukraine, the sanctions on Russia, and even the lifting of most pandemic rules have played themselves out".
"In the short term, a more dovish monetary policy will be good for the stock market, particularly high valuation tech stocks."
On Wall Street the Dow and S&P 500 ended down but off earlier lows, while the Nasdaq was higher. Europe closed in the red.
But Asia enjoyed another positive day Tuesday, with Tokyo, Singapore, Taipei, Manila and Wellington more than one% up while Shanghai, Hong Kong, Sydney, Jakarta and Bangkok also rose.
US futures also rose, while London opened higher, though Paris and Frankfurt dipped.
"Markets may well feel that the worst of the bad news is now out there, especially on the sanctions front," said OANDA's Jeffrey Halley.
"I am not so sure of that, but the market is always right, and we have to respect the momentum from a short-term perspective."
Other commentators foresaw further volatility to come.
"Over the next few weeks we'll see a lot of gyrations and a potential for an even bigger dip," Andy Kapyrin at RegentAtlantic Capital LLC told Bloomberg Television.
"But that will be a dip worth buying because most geopolitical crises are resolved relatively quickly."
Oil prices rose but the gains were more subdued than recent days as President Joe Biden considers tapping the vast US reserves to help mitigate the potential loss of Russia's huge output.
However, analysts said the measure would not likely be enough and Goldman Sachs has warned prices could hit $115.
"Another round of releasing strategic crude reserves might be a temporary solution to rising prices as long as this Russia-Ukraine crisis isn't resolved," Will Sungchil Yun, senior commodities analyst at VI Investment Corp.
A meeting of OPEC and other major producers including Russia will be closely followed on Wednesday as they discuss whether to continue with their plan to lift output.
- Key figures around 0820 GMT -
Tokyo - Nikkei 225: UP 1.2% at 26,844.72 (close)
Hong Kong - Hang Seng Index: UP 0.2% at 22,761.71 (close)
Shanghai - Composite: UP 0.8% at 3,488.83 (close)
London - FTSE 100: UP 0.1% at 7,464.87
West Texas Intermediate: UP 1.4% at $97.09 per barrel
Brent North Sea crude: UP 1.7% at $99.65 per barrel
Euro/dollar: DOWN at $1.1219 from $1.1220 late Monday
Pound/dollar: UP at $1.3419 from $1.3418
Euro/pound: UP at 83.60 pence from 83.59 pence
Dollar/yen: UP at 115.05 yen from 114.93 yen
New York - Dow: DOWN 0.5% at 33,892.60 (close)