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LONDON — Wall Street ended a downbeat week with further losses on Friday as traders braced for continued economic fallout from Russia's invasion of Ukraine. They were also cautious, keeping in mind a looming Federal Reserve rate hike, though European indices saw gains.

Oil also rose on Iran supply fears, but remained well below the 14-year peak of near $140 hit on Monday brought on by worries of disruptions to supply from Russia, a major producer.

The pound and yen hit multiyear dollar lows before regaining some ground, as traders prepared for the Federal Reserve to most likely hike interest rates next week for the first time since the pandemic, in the first of several moves this year to fight inflation.

While equities rose after Putin said his negotiators had reported "certain positive shifts" in talks with Ukraine, the enthusiasm petered out in New York trading as Washington and Brussels announced new sanctions against Russia and fighting continued.

The Nasdaq closed more than two per cent lower and the S&P 500 fell more than one per cent.

"This gullible market — or some indubitable algorithms — seems willing to take Putin's words as the makings perhaps of an exit path," said Briefing.com analyst Patrick O'Hare.

In Europe, London ended with a gain of 0.8 per cent, Paris rose by 0.9 per cent and Frankfurt climbed 1.4 per cent to post their first weekly rise since the war.

Sentiment there was also brightened by data showing the UK economy rebounded 0.8 per cent in January after a 0.2-per cent decline in December, as Omicron coronavirus curbs were lifted.

Markets have been rocked ever since Russia shocked the world by invading its neighbour on February 24.

Michael Hewson, chief market analyst at CMC Markets UK warned that "any deterioration in sentiment over the weekend could see these gains reversed in a heartbeat if Russia chooses to escalate further, as well as potentially crossing the red line of chemical, or biological weapons use". 

Oil jumped on Friday after the European Union revealed talks it is chairing about the revival of the 2015 nuclear accord with crude producer Iran must be paused, days after fresh demands from Russia complicated negotiations.

Oil has been extremely volatile ever since Moscow's invasion, with traders still fretting over Western moves to ban Russian crude.

"It's been a rollercoaster ride for oil this week, and for some, the weekend cannot come quick enough," said Stephen Innes, Managing Partner at SPI Asset Management.

Crude prices have pulled back from nearly $140 at the peak on Monday to around $110 on Friday as hopes rose that other producers will step up production.

"This optimism needs to be tempered by the fact that any increase in output from OPEC would not be enough to offset the loss of Russian supply," said Hewson at CMC Markets.

LONDON - Brent oil rebounded on Thursday, after tanking the previous day on hopes that the huge amounts of sanctions-hit Russian oil could be largely replaced by sourcing from elsewhere.

European benchmark Brent North Sea crude climbed 5.1 per cent to $116.80 per barrel in morning deals.

New York's WTI contract advanced 3.5 per cent to $112.58.

Both contracts had collapsed by more than 12 per cent in value on Wednesday, as traders also seized on a glimmer of hope for peace talks between key producer Russia and Ukraine.

Brent tumbled as low as $105.60, having hit a peak of $139 just two days before, as the Ukraine crisis continues to send shockwaves through markets.

The United Arab Emirates said on Wednesday it would urge fellow states in the oil producers' cartel of the Organisation of the Petroleum Exporting Countries to boost output, while US talks with massive producer Venezuela appeared to be making progress.

"Crude prices rebounded this morning after being whipsawed on various Russia headlines," said Markets.com analyst Neil Wilson.

"Brent and WTI plunged yesterday in a brutal reversal as the UAE indicated it could start pumping more oil and call on friends at OPEC to do more.

"Comments from Russian and Ukrainian officials also pointed towards a path to peace, but the situation on the ground is no different."

At the same time, Iraq has said it could lift output and nuclear talks with Iran were also showing signs of bearing fruit.

However, with the Ukraine war still raging and crude oil supplies still tight, expectations are for the commodity to maintain its price strength.

"Traders are still very much in a cautionary mode as it is not clear to them that the current change in momentum or shift in the direction of the oil trend will last," said AvaTrade analyst Naeem Aslam.

MADRID - Acerinox became the latest steel producer to halt operations in Spain on Thursday due to surging energy prices caused by Russia's war in Ukraine.

A union source at the Spanish stainless steel maker said the firm had halted production at its plant in Cadiz in the southern Andalucia region due to soaring electricity prices.

Electricity prices have hit record highs in recent days on the Spanish wholesale market, forcing Acerinox to push through plans to furlough all of its 1,800 staff at the Cadiz plant, he said. 

The unions, he said, were currently in talks with management to "negotiate the terms" of the so-called ERTE furlough scheme. 

The move came after a year in which the steelmaker's net profits soared to a record 572 million euros on surging global demand. 

Earlier this week two ArcelorMittal factories, both in the northern Basque Country, halted production over surging energy prices, a spokesman for the global steel giant said.

One plant located in Olaberria, with a 400-strong workforce, shut down for 15 hours on Tuesday due to "high electricity prices" which are weighing on production costs.

It resumed operations on Wednesday "but only intermittently" during off-peak hours when electricity prices were lower, he said. 

The group decided not to resume activity at a second factory with a 200-strong workforce in Sestao where operations had been due to resume Sunday after being idle for four days.

"We're following the price closely every day but we still don't know how long this situation of exorbitant prices is going to last," he said.

According to another industry source, "other steel plants" have also decided to halt production for several days, such as the Spanish group Megasa. 

Madrid has for months urged its European partners to change the mechanism which couples electricity prices to the gas market but its pleas have so far fallen on deaf ears, despite support from Paris.

But since Russia's invasion of Ukraine, positions have shifted with the question of electricity prices to be discussed at a two-day EU summit at Versailles near Paris which began on Thursday. 

In a statement, Fernando Soto, head of AEGE, which represents energy-intensive companies, urged the Spanish government to introduce "emergency measures". 

"Energy-intensive industries in Spain are suffering from the rising costs of electricity supplies" which have reached levels "never before seen in our market," he said on Wednesday, warning the sector's activity was "at serious risk". 

PARIS — The spike in energy prices caused by Russia's war in Ukraine will produce effects comparable to the 1973 oil shock, French Economy Minister Bruno Le Maire warned on Wednesday.

The current energy crisis was "comparable in intensity, in brutality, to the oil shock of 1973," Le Maire told a conference in Paris.

"In 1973, as you know, the response caused an inflationary shock, leading central banks to massively increase their rates, which killed off growth," Le Maire added.

"This has a name: stagflation, and it's precisely what we want to avoid in 2022." 

The first oil shock in the early 1970s was caused by the Yom Kippur war when Egyptian and Syrian forces launched an offensive against Israel.

Six Arab members of the oil cartel of the Organisation of the Petroleum exporting Countries (OPEC) declared an embargo on exports to countries supporting Israel, notably the United States.

They quadrupled the oil price to $11.65 a barrel, provoking recessions in Western countries and steep inflation.

European wholesale gas and crude oil have rocketed to record, or near-record prices this week due to supply fears linked to Russia's February 24 invasion of Ukraine.

The United States and Britain announced on Tuesday they were cutting off Russian energy imports in response to the war, triggering another surge in prices.

The price of Brent crude, the international benchmark, was up at almost $130 per barrel on Wednesday.

RABAT — Moroccan truck drivers are observing a three-day strike in protest at spiralling fuel costs, a union said on Tuesday, as oil prices spike over Russia's war in Ukraine.

Around three quarters of drivers are observing the strike, said Mounir Benazouz of the SNPTR truckers' union.

Four other unions have also joined the action which ends on Wednesday.

"We are calling on the government to put a ceiling on fuel prices and the profit margins of distributors, because the situation is becoming more and more critical," Benazouz said.

He added that the strike could be extended unless the government responds.

The interior ministry said on Tuesday it had taken measures to "ensure the free circulation of people and goods".

In a statement, it said striking was "a right guaranteed by the constitution" but vowed to "act firmly against any attempt to breach the peace or undermine the rights of non-strikers".

The government of Prime Minister Aziz Akhannouch has for weeks been facing growing unrest over mounting living costs, with price hikes on fuel and other essential goods sparking demonstrations across the North African kingdom.

Inflation, spurred by rising global commodities prices, topped 3 per cent year-on-year in January, prior to Russia's invasion of Ukraine.

Moroccan farmers are also suffering the effects of a long drought which has battered a sector that contributes about 14 per cent of gross domestic product.

LONDON — Stock markets fell, metals prices hit record highs and oil surged on Monday after the United States raised the prospect of an embargo on Russian crude.

European markets seesawed in afternoon trading, paring back some losses after sharp drops earlier in the day following a 4 per cent fall in Hong Kong.

Wall Street was lower in early trading.

"The catalyst for the overnight fallout were reports that the US and Western allies are considering a ban on Russian oil imports," said Briefing.com analyst Patrick O'Hare.

US Secretary of State Antony Blinken said on Sunday that the White House and allies were in talks about banning oil imports from Russia following its invasion of Ukraine.

But German Chancellor Ola Scholz on Monday cautioned against banning Russian oil and gas, saying doing so could put Europe's energy security at risk.

The benchmark Brent North Sea crude oil contract soared to a near 14-year high as it reached $139.13 before cooling to $121.54. 

The record high stands at $147.50, achieved in 2008 during the global financial crisis.

European gas prices, meanwhile, struck record peaks on energy supply fears.

Russia is one of the world's biggest crude producers and is also a leading supplier of natural gas.

"As the dust has settled, fear of European bans on Russian oil — and potential retaliation or follow-up moves in gas or other commodities — has subsided," said OANDA analyst Craig Erlam.

Commodities have been red hot since Russia's assault on its neighbour, with gold rising above $2,000 an ounce thanks to the metal's status as a haven investment, before falling back to $1,986.

Aluminium, copper and palladium prices kicked off the week with record highs and nickel rocketed by more than 25 per cent in value.

"Commodity and energy prices have inevitably been under upward pressure, with escalating sanctions against Russia and the shuttering of some Ukrainian ports driving the search for replacement supplies of crops, metals and energy," noted Richard Hunter, head of markets at Interactive Investor.

Stagflation worries 

The surge in prices is handing a headache to central banks, which have already begun removing pandemic-era cash stimulus and are raising interest rates to bring down inflation that stood at the highest levels in decades even before the invasion.

"The current backdrop is also stoking stagflation concerns, with rising inflationary pressure unlikely to be offset by sufficient global economic growth to prevent a stagnant environment," Hunter added.

The International Monetary Fund warned at the weekend that the war and sanctions on Russia would have a "severe impact" on the global economy.

In foreign exchange on Monday, the euro sank to the lowest level for almost two years against the dollar, pummelled by fears of sanctions on Russian energy that would hit the eurozone's economic recovery, traders said.

The euro slid 1.1 per cent to $1.0806 before recovering slightly later in the day, while the ruble hit a record-low 142.18 against the dollar.

COLOMBO — Sri Lanka's central bank hiked interest rates by 1 percentage point on Friday and urged the government to increase taxes as the country skirts economic collapse.

The South Asian island nation is in the grip of a foreign exchange crisis that has led to acute shortages of food, fuel, medicines and industrial raw materials, sending inflation soaring.

Food inflation hit a record 25 per cent in January while overall price increases reached 16.8 per cent, a fourth consecutive monthly record.

Public transport has been crippled since Wednesday with no diesel for buses and large parts of the country of 21 million people hit by lengthy power cuts.

On Thursday, President Gotabaya Rajapaksa sacked the energy and industry ministers after they both criticised the government's efforts to deal with the crisis.

Another senior minister Vasudeva Nanayakkara expressed solidarity on Friday with the sacked ministers and said he would not attend cabinet meetings.

The Central Bank of Sri Lanka hiked the benchmark deposit and lending rates by 100 basis points each to 6.5 per cent and 7.5 per cent, respectively.

The move follows a January decision to lift borrowing costs by 50 basis points.

The increases "will dampen the possible build-up of underlying demand pressures on the economy, which would, in turn, help ease pressures in the external sector", the bank said in a statement.

It also urged the government to increase fuel prices and electricity tariffs immediately as well as raise taxes to shore up government revenue. That came after a similar call by the International Monetary Fund.

The bank also appealed to officials to suspend ongoing infrastructure projects, sell state-owned land and discourage "non-essential" imports.

A broad import ban has been in place since March 2020 to shore up foreign reserves after the pandemic knocked out the lucrative tourism sector which previously earned about $4.5 billion annually.

In a statement following its annual review of Sri Lanka's economy, the IMF on Thursday warned the country that its foreign debt was "unsustainable" and called for urgent action.