REUTERS/Marko Djurica
- US futures and European stocks rose on Tuesday ahead of peace talks between Moscow and Kyiv.
- The talks are the first in 2 weeks, while Western officials discuss non-Russian energy supplies and more sanctions.
- Oil briefly rose on reports Saudi Aramco may boost prices of its crude, as COVID cases rise in China.
Global stocks rose on Tuesday ahead of peace talks between Russia and Ukraine, as the two sides attempt to broker a ceasefire agreement.
US futures rose, with those on the S&P 500 up 0.32%, Dow Jones futures up 0.32%, and with Nasdaq 100 futures gaining 0.25%. European stocks also rose, with the UK's FTSE 100 up 0.88%, the German DAX climbing 1.24%, the French CAC 40 jumping 1.59%, while the pan-European Stoxx 600 rose 1.07%.
"S&P 500 futures moved beyond the 100-day moving average yesterday and are extending the gains today basically confirming that the market for now is shrugging off the war in Ukraine, higher interest rates, and tight commodity markets," Peter Garnry, head of equity strategy at Saxo Bank, said.
Oil rose following reports Saudi Arabia had raised its official monthly selling prices to Asian customers to record highs — a sign traders interpret as a lack of concern about a drop-off in demand in China, where surging COVID cases have forced financial hub Shanghai into lockdown.
Brent crude was last up 0.3% at $109.79 a barrel, having risen to as much as $111.59 earlier in the day, while WTI crude fell 0.2% to $105.86 a barrel, below a session high of $107.66.
Oil fell by almost 7% on Monday, after as a surge in cases of COVID in China and lockdowns in various major cities threatened to undermine demand for oil in the world's largest energy importer.
"For the first time since war broke out in Ukraine more than a month ago, the price movement was not primarily attributable to news about the war. Instead, it was caused mainly by the lockdown in the Chinese business hub of Shanghai," said Commerzbank.
As war in Ukraine enters its second month, peace talks so far have brought little in the way of progress. Flows of key raw materials such as wheat, coal and nickel from both Russian and Ukraine have been disrupted by conflict, which in turn has seen commodity prices soar.
Western officials are considering further sanctions on Russia, while US and German officials are discussing alternative sources of fuel, given Germany's huge reliance on Russian oil and gas.
Mark Haefele, Chief Investment Officer, UBS Global Wealth Management, said: "In the near term, we believe the most critical question for markets, one that will determine which of these scenarios plays out, is when will we reach – or have we already reached – peak sanctions and oil prices?"
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