Volkswacht Bodensee - Stocks diverge, oil climbs at end of volatile week

Focus remains on Russia's invasion of Ukraine and its impact on the global economy as surging commodity prices ramp up expectations of inflation across the world.

Sanctions on Russia have raised concerns it could default on its debt, but Moscow said Thursday it had paid interest on dollar-denominated bonds due this week.

"There is relief after Russia avoided default on its interest payment, yet oil prices jump again and boost inflation expectations," said Swissquote senior analyst Ipek Ozkardeskaya.

The International Monetary Fund, World Bank and other top world lenders on Friday warned of "extensive" economic fallout from the Ukraine war and expressed "horror" at the "devastating human catastrophe".

"The entire global economy will feel the effects of the crisis through slower growth, trade disruptions, and steeper inflation," read a joint statement from institutions including the European Bank for Reconstruction and Development.

Warning that the world could face the "biggest oil supply shock in decades", the International Energy Agency called on governments to urgently implement measures to cut global crude consumption within months.

Asian equities mostly closed higher Friday to end the week on a strong note after a blockbuster rebound boosted by China's pledge of support for its markets. Hong Kong dipped after soaring midweek.

Eurozone stock markets dropped more than one percent approaching the half-way stage.

After a painful start to the week, stocks enjoyed a massive bounce on optimism over peace talks between Moscow and Kyiv -- and after Beijing's signal that it was ready to shore up markets and ease off its tech crackdown.

Central banks are also in sharp focus.

While the Federal Reserve announced the first of what many think will be seven interest rate hikes this year, traders have largely accounted for a period of tighter monetary policy.

- Oil price pressure -

Markets remain on edge over developments in the war.

Talks between US President Joe Biden and his Chinese counterpart Xi Jinping will be closely followed, with the White House looking to get Beijing onside in trying to bring an end to the European conflict.

That comes as Russia appeared to play down reports of progress in talks with Ukraine on a ceasefire, while the Pentagon warned Vladimir Putin could threaten to use nuclear weapons if the conflict dragged on.

But while the extreme volatility that has characterised markets since Russia's invasion three weeks ago has died down for now, commentators remain cautious.

The uncertainty over Ukraine, and reports that some lockdown measures in Chinese tech hub Shenzhen -- which helped fuel a markets selloff earlier this week -- were being eased early, has helped push oil prices back up above $100 per barrel.

Stephen Innes of SPI Asset Management said the commodity would probably remain elevated.

"Market internals suggest that oil's downside remains sticky even when Ukraine and Russia are inching towards peace," he noted.

"So there is a genuine belief that even if the war does end, sanctions on Russia will likely persist, making oil supplies tougher to source for longer."

- Key figures around 1130 GMT -

London - FTSE 100: DOWN 0.7 percent at 7,333.24 points

Frankfurt - DAX: DOWN 1.6 percent at 14,152.27

Paris - CAC 40: DOWN 1.4 percent at 6,522.53

EURO STOXX 50: DOWN 1.2 percent at 3,837.66

Hong Kong - Hang Seng Index: DOWN 0.4 percent at 21,412.40 (close)

Tokyo - Nikkei 225: UP 0.7 percent at 26,827.43 (close)

Shanghai - Composite: UP 1.1 percent at 3,251.07 (close)

Brent North Sea crude: UP 0.7 percent at $107.38 per barrel

West Texas Intermediate: UP 1.5 percent at $104.48 per barrel

New York - DOW: UP 1.2 percent at 34,480.76 (close)

Euro/dollar: DOWN at $1.1043 from $1.1095 late Thursday

Pound/dollar: DOWN at $1.3129 from $1.3149

Euro/pound: DOWN at 84.11 pence from 84.35 pence

Dollar/yen: UP at 119.05 yen from 118.64 yen

O.Krause--BTB