Il Nuovo Postiglione - Asian markets extend global rally, oil rebounds

After a painful start to the week, global stocks have enjoyed a massive bounce in the past few days thanks to 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.

And 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.

Focus remains on Russia's invasion of Ukraine and its impact on the global economy as surging commodity prices ramp up expectations for ever-higher inflation, already at a 40-year high in the United States.

Talks between 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 continues to drag on.

On equity markets, Asia struggled at the start of the day to keep up the momentum seen in New York but got their mojo back in the afternoon.

Hong Kong started more than one percent down before pushing back up. That came after soaring a mammoth 16 percent on Wednesday and Thursday after China's top economic official vowed measures to support beaten-down markets and indicated a regulatory drive against the tech sector was nearing its end.

There were also gains in Tokyo, Shanghai, Sydney, Seoul, Singapore, Taipei and Wellington, though Manila and Jakarta dipped.

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

"I don't necessarily expect the rest of the year to be that easy," Lori Calvasina, of RBC Capital Markets LLC, told Bloomberg Television.

"Volatility is likely to stay elevated for quite some time", even as sentiment gauges "have been a screaming buy in some respects for quite some time".

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.

And 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 said in a note. "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."

And Michael Hewson of CMC Markets added: "It's important to note that sentiment remains fragile, and that the risk of further escalation remains a real concern despite the gains of the last two weeks, as Russia continues to get bogged down by rugged Ukrainian resistance."

- Key figures around 0710 GMT -

Brent North Sea crude: UP 2.6 percent at $109.38 per barrel

West Texas Intermediate: UP 3.0 percent at $106.04 per barrel

Hong Kong - Hang Seng Index: UP 0.1 percent at 21,515.74

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

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

Dollar/yen: UP at 118.87 yen from 118.64 yen late Thursday

Euro/dollar: DOWN at $1.1083 from $1.1095

Pound/dollar: UP at $1.3159 from $1.3149

Euro/pound: DOWN at 84.22 pence from 84.35 pence

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

London - FTSE 100: UP 1.3 percent at 7,385.34 (close)

E.Scozzafava--INP