The euro rose Thursday after Russia resumed gas supplies to Europe, while traders await a crucial European Central Bank policy meeting, with the continent's equities struggling.

The news helped Asian markets, which recovered from an early sell-off to end mixed following news that the Nord Stream 1 pipeline's taps had been switched back on after 10 days of maintenance.

The announcement removed a measure of uncertainty among traders who had feared Moscow would keep gas flows cut in retaliation for Brussels' sanctions imposed after Vladimir Putin's invasion of Ukraine.

Putin had said the Nord Stream 1 pipeline would be turned back on, but added that supplies would be limited unless a row over some elements of the sanctions is resolved.

Western leaders remain cynical regarding Putin's plans ahead of the northern hemisphere winter, and the European Commission has urged European Union members to reduce demand for natural gas by 15 percent over the winter to counter Russia's "blackmail".

After a negative start, Asian and European equities mostly rose, with the more upbeat mood following another rally on Wall Street thanks to healthy earnings.

Tokyo, Sydney, Seoul, Mumbai, Taipei, Bangkok and Wellington advanced but Hong Kong, Shanghai, Singapore and Manila fell, while London, Paris and Frankfurt retreated in early exchanges.

Analysts remain cautious about the near-term outlook for the global economy as it is rattled by a range of issues including the Ukraine war, an energy crisis, and China's slowdown and supply chain snarls.

The euro climbed again, having fallen to parity with the dollar last week partly because of the European Central Bank's slow response to inflation compared with the Federal Reserve's series of sharp rate hikes.

Focus is now on the ECB as it prepares to hike rates for the first time in more than a decade, with most observers expecting a quarter-point lift and some speculating about a half-point move.

Officials are walking a tightrope, as they must try to tame red-hot inflation while not tipping the economy over a cliff, all against the backdrop of an energy crisis sparked by Russia's invasion of Ukraine.

Added to the mix is a fresh political crisis in Italy that saw Prime Minister Mario Draghi ousted Thursday, which could lead to months of uncertainty.

There was little reaction to US President Joe Biden's comments that he would hold talks with Xi Jinping "within the next 10 days" as he decides whether or not to remove some Trump-era tariffs on Chinese goods.

Cameron Dawson, of NewEdge Wealth, said the recent gains by markets could not yet be taken as a sign of a recovery.

A political crisis in Italy, as Prime Minister Mario Draghi teeters, adds to the list of issues the European Central Bank must contend with as it tries to rein in inflation and support the eurozone economy
A political crisis in Italy, as Prime Minister Mario Draghi teeters, adds to the list of issues the European Central Bank must contend with as it tries to rein in inflation and support the eurozone economy AFP / Andreas SOLARO

He warned that many equities were "still in very distinct downtrends so you can see a rally off maybe an oversold level, but really if you are not starting to recover and break into a better uptrend it really remains to be seen if this can continue".

"So it's more a relief at this point and not necessarily a trend change."

Oil extended Wednesday's drop -- with WTI below $100 -- after data showed US stockpiles rose more than expected last week as Americans opted not to pay for expensive petrol.

The figures come despite being at the height of the high-demand summer driving season.

Tokyo - Nikkei 225: UP 0.4 percent at 27,803.00 (close)

Hong Kong - Hang Seng Index: DOWN 1.51 percent at 20,574.63 (close)

Shanghai - Composite: DOWN 1.0 percent at 3,272.00 (close)

London - FTSE 100: UP 0.2 percent at 7,249.09

Euro/dollar: UP at $1.0202 from $1.0175 Wednesday

Pound/dollar: UP at $1.1947 from $1.1975

Euro/pound: UP at 85.32 pence from 84.96 pence

Dollar/yen: UP at 138.59 yen from 138.26 yen

West Texas Intermediate: DOWN 1.0 percent at $98.86 per barrel

Brent North Sea crude: DOWN 0.8 percent at $106.02 per barrel

New York - Dow: UP 0.2 percent at 31,874.84 (close)