A man walks past the Euro sculpture in Frankfurt, Germany, March 11, 2021. The European Central Bank is behind the U.S. Federal Reserve and other central banks around the world in combating surging inflation amid an energy crisis provoked by Russia s war in Ukraine. AP
After an uneasy start in Asia, most of the region pushed into positive territory following news that the Nord Stream 1 pipeline's taps had been switched back on after 10 days of maintenance.
The announcement removed a measure of uncertainty among traders who had feared Moscow would keep gas flows cut in retaliation for Brussels' sanctions imposed over Vladimir Putin's invasion of Ukraine.
Putin had said the Nord Stream 1 pipeline would be turned back on, but added that supplies would be limited unless a row over some elements of the sanctions is resolved.
But Western leaders remain cynical over his plans ahead of the northern hemisphere winter, and the European Commission has urged EU members to reduce demand for natural gas by 15 percent over the winter to counter Russia's "blackmail".
The IMF warned Wednesday that a halt in supplies could slash 2022 GDP by 1.5 percent.
After a negative start, Asian and European equities mostly rose, with the more upbeat mood following another rally on Wall Street thanks to healthy earnings.
Tokyo, Sydney, Seoul, Mumbai, Taipei, Bangkok and Wellington advanced while London, Paris and Frankfurt were up after the open.
But Hong Kong, Shanghai, Singapore and Manila fell.
Analysts remain cautious about the near-term outlook for the global economy as it is rattled by a range of issues including the Ukraine war, an energy crisis, and China's slowdown and supply chain snarls.
The euro climbed again, having fallen to parity with the dollar last week partly because of the European Central Bank's slow response to inflation compared with the Federal Reserve's series of sharp rate hikes.
European rate hike?
Focus is now on the ECB as it prepares to hike rates for the first time in more than a decade, with most observers expecting a quarter-point lift and some speculating about a half-point move.
Officials are walking a tightrope, as they must try to tame red-hot inflation while not tipping the economy over a cliff, all against the backdrop of an energy crisis sparked by Russia's invasion of Ukraine.
Added to the mix is a fresh political crisis in Italy that could see Prime Minister Mario Draghi ousted, leading to months of uncertainty.
There was little reaction to US President Joe Biden's comments that he would hold talks with Xi Jinping "within the next 10 days" as he decides whether or not to remove some Trump-era tariffs on Chinese goods.
And Cameron Dawson, of NewEdge Wealth, said the recent gains on markets could not yet be taken as a sign of a recovery.
He warned that many equities were "still in very distinct downtrends so you can see a rally off maybe an oversold level, but really if you are not starting to recover and break into a better uptrend it really remains to be seen if this can continue".
"So it's more a relief at this point and not necessarily a trend change."
Oil extended Wednesday's drop -- with WTI below $100 -- after data showed US stockpiles rose more than expected last week as Americans opted not to pay for expensive petrol.
The figures come despite being at the height of the high-demand summer driving season.