New York (AFP) - European and US stocks rallied while oil prices retreated on Tuesday as apparent progress in peace talks between Moscow and Kyiv fueled hopes of an end to the Ukraine conflict.
Both sides of the war pointed to headway in the negotiations held in Turkey, with Ukrainian President Volodymyr Zelensky alluding to "positive" signals, while adding that Kyiv would not "decrease our defense efforts."
Russia said it would scale down fighting around two Ukrainian cities following the talks, and raised the possibility of a meeting between the countries' presidents.
"It is the first time in this conflict where we have seen any indications for any form of easing of military action from the Russian side," SEB analyst Bjarne Schieldrop told AFP.
"Until this point the Russian stand has been very firm of its goals," Schieldrop said.
But US officials reacted cautiously to the developments, with President Joe Biden telling reporters the West wanted to see if Russia will "follow through" on a promise to deescalate hostilities around Kyiv and another city in Ukraine.
Still, the headlines on Ukraine were "a good catalyst to push things higher," said Tom Cahill of Ventura Wealth Management.
Both Paris and Frankfurt climbed about three percent, while the euro also forged higher.
Wall Street stocks also progressed, with the S&P 500 winning 1.2 percent.
Oil prices continued their retreat, although crude finished well above session lows after the US oil futures benchmark had slid below $100 a barrel.
Asian stock markets had earlier mostly rallied even before the statements from Istanbul.
However, Shanghai bucked the trend, with stocks falling a day after China's biggest city and financial hub of 25 million people was placed back in lockdown due to Covid-19.
And the yen firmed versus the dollar, after tumbling the previous day to a 2015 low on loose Japanese monetary policy.
An announcement that the Bank of Japan would buy 10-year government bonds had reinforced the divergence between the BoJ and Fed as US officials battle to rein in inflation.
Key figures around 2050 GMT
West Texas Intermediate: DOWN 1.6 percent at $104.24 per barrel
Brent North Sea crude: DOWN 2.0 percent at $110.23 per barrel
New York - DOW: UP 1.0 percent at 35,294.19 (close)
New York - S&P 500: UP 1.2 percent at 4,631.60 (close)
New York - Nasdaq: UP 1.8 percent at 14,619.64 (close)
London - FTSE 100: UP 0.9 percent at 7,537.25 (close)
Frankfurt - DAX: UP 2.8 percent at 14,820.33 (close)
Paris - CAC 40: UP 3.1 percent at 6,792.16 (close)
EURO STOXX 50: UP 3.0 percent at 4,002.18 (close)
Tokyo - Nikkei 225: UP 1.1 percent at 28,252.42 (close)
Hong Kong - Hang Seng Index: UP 1.1 percent at 21,927.63 (close)
Shanghai - Composite: DOWN 0.3 percent at 3,203.94 (close)
Euro/dollar: UP at $1.1090 from $1.0985 late Monday
Pound/dollar: UP at $1.3094 from $1.3088
Euro/pound: UP at 84.66 pence from 83.93 pence
Dollar/yen: DOWN at 122.77 yen from 123.86 yen
