Stocks climb on prospect of easing Ukraine tension

Bloomberg

Stocks rise on Wednesday as traders weighed the prospect of diminishing tension over Ukraine and the risk of further twists after Russia said it was withdrawing some forces.
Shares were up in Japan, Hong Kong and China, where slowing inflation is boosting the central bank’s scope to ease policy to prop up growth. US futures were stable and European contracts rise after technology stocks helped the S&P 500 snap three days of losses.
Russia announced a partial pullback of thousands of troops massed near the Ukrainian border and appeared to favor a diplomatic solution to the crisis there. President Joe Biden said the US has yet to verify Moscow’s claims and an invasion remains possible, which the Kremlin has repeatedly denied.
Oil was above $92 a barrel as traders assessed worries about potential disruptions to commodity supplies. Havens like longer-maturity Treasuries and gold that sold off in the past 24 hours largely maintained those losses.
At the same time, other parts of global markets are flashing ongoing nervousness. Volatility gauges for both the S&P 500 and the Treasury market are sitting significantly above 12-month averages, a sign that traders remain on edge about risks such as the Ukraine standoff.
The latest data from China showed elevated but easing factory-gate inflation, raising tentative hopes that the manufacturing powerhouse could help to curb global price pressures if the trend continues. For now, investors are continuing to fret about escalating costs and the likelihood of tightening monetary policy in places like the US and the
UK, where inflation posted a surprise jump.
“Volatility and uncertainty is just going to be heightened, that can be due to Russia-Ukraine, it could be due to
stubborn inflation,” Brenda O’Connor Juanas, financial adviser at UBS, said on Bloomberg Television. “There is a lot more for clients and investors to be uncertain about.”
Biden said Russian troops remain in a “threatening position.” He agreed with a Kremlin declaration that diplomacy is still possible but vowed he would not “sacrifice basic principles” that countries — including Ukraine — should have the right to keep their own borders.
The latest Russian comments are a hopeful sign and assets like the ruble and Russian stocks have recovery potential, Christopher Weafer, founder and senior partner at Macro-Advisory Ltd., said on Bloomberg Television.
“But frankly after several months of high risk and speculation, it’s going to take several weeks for people to get comfortable with that, no matter what happens in the next
couple of days,” he said.
Traders are awaiting the latest Federal Reserve minutes. They may shape views on how fast the Fed will raise interest rates and shrink its bond
holdings in coming months.
S&P 500 futures fall 0.1% as of 7:16 am in London. The S&P 500 rose 1.6% and Nasdaq 100 futures also drop 0.2%. The Nasdaq 100 rises 2.5%.
While Japan’s Topix index added 1.7%, Australia’s S&P/ASX 200 Index gained 1.1% and South Korea’s Kospi index rises 2%.
Hong Kong’s Hang Seng Index climbs 1.4% and China’s Shanghai Composite Index added 0.6%. Euro Stoxx 50 futures were up 0.5%.
The Japanese yen was at 115.68 per dollar and the offshore yuan was at 6.3357 per dollar. While the Bloomberg Dollar Spot Index falls 0.1%, the euro was at $1.1365.
West Texas Intermediate crude was at $92.67 a barrel, up 0.6% and gold was at $1,855.41 an ounce, up 0.1%.