A man looks at stock market monitors in Taiwan
Representational image. Reuters / Nicky Loh

European stock markets rose on Wednesday as investors paused after three days of selling, while oil prices edged back down from their latest peak.

Russia accused the United States of declaring an economic war, after U.S. President Joe Biden announced a ban on Russian oil exports on Tuesday.

Western sanctions have cut Russia off from global trade and financial markets in response to its invasion of Ukraine.

But after three days of losses, the MSCI world equity index, which tracks shares in 50 countries, was up 0.7% on the day at 1224 GMT.

Europe's STOXX 600 gained 3.1% and Wall Street futures were also up.

Peter McCallum, rates strategist at Mizuho, said the rebound in equities was a temporary relief rally which could be attributed to news of talks between Russia and Ukraine.

"People are thinking that we might have seen the worst of the escalation for the foreseeable future," he said, describing the day's bounce as a "consolidation".

"Maybe markets are less panicked about the conflict escalating into other regions than they were at the start of the week."

Analysts considered the rebound to be a technical correction, rather than signalling a tangible change in sentiment about the conflict, which is Europe's biggest war since World War Two.

"For now, markets are relieved by the fact we haven't had any fresh bearish news since yesterday's announcement of a ban in oil imports from Russia," said Fawad Razaqzada, market analyst at Think Markets.

"The markets were severely oversold... this is also typical of a bear market when you sometimes see multiple percentage point gains in a short period of time as the shorts are squeezed, before the rally runs out of steam and the downward trend resumes."


The Russian invasion and ensuing sanctions have played havoc with global supply chains, sending prices soaring across the commodities market.

Oil prices climbed higher after the U.S. ban, which Goldman Sachs analysts said had already been priced in, but by 1238 GMT on Wednesday they had pulled back somewhat.

Brent crude futures were at $124.78 a barrel, down 2.5% on the day <CLOc1>, having eased since Monday's high of $139.13.

JPMorgan analysts said that in the past two weeks the war has triggered the highest commodity price inflation in more than 60 years.

"Russia has dominant supply positions in: nickel, palladium, platinum, rhodium, aluminium and copper," JPMorgan said.

Dan Scott, chief investment officer at Vontobel, said that "turbocharged" commodity price inflation leaves central banks in a "sticky situation".

"War is inflationary and this war in particular is very inflationary... not just in terms of energy, oil and gas, but it's inflationary across the commodities complex,"

"Grain prices don't react to central bank policy, and nor do necessarily nickel prices... hiking interest rates is not going to have a direct impact."

The London Metal Exchange intervened on Tuesday to calm the nickel market after prices rocketed in a matter of hours to records of over $100,000 a tonne.

After a four-session rally, gold fell on Wednesday as markets became less risk-averse .

The safe-haven dollar was down 0.5%, at 98.572 versus a basket of currencies.

German government bond yields rose ahead of the European Central Bank meeting on Thursday.

The 10-year U.S. Treasury yield was a touch higher at 1.9061% .

Elsewhere, bitcoin led a rally in cryptocurrencies after an apparently prematurely published statement on the U.S. Treasury website calmed fears about a sudden tightening of U.S. rules around such assets.