World stock markets struggled Wednesday after strong gains during the previous session, as Russia downplayed hopes of a breakthrough in peace talks with Ukraine, Germany's growth outlook darkened and oil prices rose.

Germany was the main eurozone laggard, with the DAX index ending the session down 1.5 percent after Berlin slashed its economic growth forecast for 2022, warning that the war in Ukraine and soaring energy prices would hit Europe's biggest economy.

Equity markets elsewhere were mixed, with Paris and New York joining Frankfurt in retreat.

The Dow snapped a four-day winning streak in a retreat tied to skepticism over Ukraine peace prospects, as well as profit taking after earlier gains.

Deepening the gloom was news that German inflation had reached a four-decade high as consumer prices rose by 7.3 percent annually, up from 5.1 percent in February.

The Ukraine conflict had a "considerable impact on the high rate," said federal statistics agency Destatis.

The last time inflation hit such levels was in the autumn of 1981 in what was then West Germany, when oil prices increased "sharply" as a consequence of the Iran-Iraq war, the agency said.

Germany's fellow eurozone economy Spain also saw its inflation rate hit an almost four-decade high. Official data showed it jumping to 9.8 percent in March from 7.6 percent in February, its highest level since 1985.

The war in Ukraine has also seen oil prices soar. Brent North Sea crude and West Texas Intermediate both added some three percent Wednesday on persistent supply worries linked to the conflict.

"The prospect of heavy pressure on European consumers from higher energy prices is driving down the Dax and others, although the FTSE 100 has escaped the worst of it for now," said Chris Beauchamp, chief market analyst at online trading platform IG, as London just about bucked the negative trend.

Analysts said it was expected that OPEC and other major producers including Russia would decide against lifting oil output at their monthly meeting on Thursday.

After apparent progress in negotiations with Russia lifted equities Tuesday, stocks pulled back as authorities in the northern Ukraine city of Chernigiv said the area was "shelled all night" despite Moscow's pledge to "radically" reduce fire there and around the capital Kyiv.

Russian officials also played down hopes of a breakthrough, saying there was nothing "too promising" from the discussions.

Hope that peace talks could bring an end to a month-long conflict in Ukraine have buoyed markets
Hope that peace talks could bring an end to a month-long conflict in Ukraine have buoyed markets AFP / Sergey BOBOK

"It seems the Russians are continuing with military operations," said Oanda's Edward Moya.

"Talks have been deemed positive, but many traders are expecting a prolonged period of time before a breakthrough in reaching a peace agreement will happen."

New York - DOW: DOWN 0.2 percent at 35,228.81 (close)

New York - S&P 500: DOWN 0.6 percent at 4,602.45 (close)

New York - Nasdaq: DOWN 1.2 percent at 14,442.27 (close)

London - FTSE 100: UP 0.6 percent at 7,578.75 (close)

Frankfurt - DAX: DOWN 1.5 percent at 14,606.05 (close)

Paris - CAC 40: DOWN 0.7 percent at 6,741.59 (close)

EURO STOXX 50: DOWN 1.1 percent at 3,959.14 (close)

Tokyo - Nikkei 225: DOWN 0.8 percent at 28,027.25 (close)

Hong Kong - Hang Seng Index: UP 1.4 percent at 22,232.03 (close)

Shanghai - Composite: UP 2.0 percent at 3,266.60 (close)

Brent North Sea crude: UP 2.9 percent at $113.45 per barrel

West Texas Intermediate: UP 3.4 percent at $107.82 per barrel

Euro/dollar: UP at $1.1162 from $1.1086 late Tuesday