European markets waver amid doubts over Russian withdrawl in Ukraine

LONDON — European stocks retreated on Wednesday following the latest round of talks between Russia and Ukraine, aimed at finding a solution to the conflict.

The pan-European Stoxx 600 fell 0.5% in early trade, with autos shedding 1.6% to lead losses, while oil and gas stocks gained 2.1%.

In terms of individual share price movement, Finland’s Nokian Tyres fell 6%, while Sweden’s Lundin Energy added 5.5%.

Investor sentiment was boosted on Tuesday following negotiations between Russian and Ukrainian officials in Turkey, at which Russia’s deputy defense minister claimed Moscow had decided to “drastically” cut back its military activity near Ukraine’s capital.

Alexander Fomin, who spoke following the talks in Istanbul, said Russia would slow its military operations near Kyiv and Chernihiv in order for peace talks to progress. Russia previously claimed that it would reduce military operations in other parts of Ukraine but then continued its advance.

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Growing hope for a cease-fire appeared to boost investor sentiment Tuesday, as Dow Jones Industrial Average futures rose 200 points, or 0.6%. S&P 500 futures also climbed 0.6%, while Nasdaq 100 futures climbed 0.7%. Meanwhile, the price of U.S. benchmark West Texas Intermediate crude oil, which spiked on the heels of Russia’s invasion of Ukraine, fell more than 4% to $100 per barrel.

Doubts have set in over the pledge, however, and while the Russian military has begun moving some of its troops in Ukraine away from areas around Kyiv to positions elsewhere in Ukraine, Pentagon Press Secretary John Kirby warned the troop movements do not amount to a retreat.

Shares in Asia-Pacific were mixed in Wednesday trade as investors watch for developments surrounding the war in Ukraine. Stateside, traders are keeping tabs on a slew of key economic reports, while also monitoring the Federal Reserve’s planned interest rate hikes.

The Job Openings and Labor Turnover Survey on Tuesday showed 11.3 million job openings, higher than the 11.1 million expected. The ADP will also release its private payrolls data ahead of the closely watched monthly jobs report, on Friday.

Guy Miller, chief market strategist and head of macroeconomics at Zurich Insurance, told CNBC on Wednesday that despite recent volatility, markets are following the “typical dynamic during wartime.”

“When we compare the run-into the war in Ukraine — very similar pattern to a number of crises that we’ve looked at in the past, and actually when we look at the performance of the past month or so — following that typical trajectory,” he said.

“The forward trajectory still for markets, for risk assets, is higher, but let’s be very clear: this is a highly risky situation until we’re back to the fundamentals, we hope, which is looking at inflation and looking at what interest rate policy is going to be to contain that.”