Asian stocks rose Wednesday as investors gave a cautious welcome to Russia's pledge to radically wind down military activity around two cities, including Kyiv, lifting hopes for a ceasefire in the month-long Ukraine war.
After talks between the two sides in Turkey, a rally on the US and European markets caused a drop in oil prices.
Russia's deputy defence minister Alexander Fomin said there was progress on the neutrality and non-nuclear status of Ukraine, two central Russian concerns.
And Kyiv's negotiator, David Arakhamia, said there were sufficient conditions for President Volodymyr Zelensky and his Russian counterpart Vladimir Putin to meet in a bid to end the crisis.
The excitement was tempered by the news that world leaders greeted with scepticism, with Joe Biden saying he wanted to see if Moscow would follow on a promise to de-escalate.
The Pentagon said Putin had merely repositioned a small number of forces near Kyiv but could be preparing a major offensive elsewhere.
Tokyo bucked the trend by falling.
It's frustrating to see that markets are reacting as strongly as they are, according to Alexander Rodnyansky, an adviser to Zelensky, told Bloomberg TV.
The success of Ukraine in the battlefield and the pressure of sanctions are the only things that will bring them to the negotiating table. Political analyst Evgeny Minchenko, a Moscow-based political analyst, said there was a serious misunderstanding of what both sides said in Istanbul after the talks.
The Russian army is concentrating its resources against the Ukrainian army in the eastern region of Donbas, so far I just heard that there will be less action near Kyiv and Chernigiv. By Tuesday evening Ukraine's general staff - while confirming Russian units were withdrawing from the Kyiv and Chernigiv regions - said it was most likely a troop rotation intended to mislead Ukraine's military.
We're not prepared to call this a retreat or even a withdrawal, Pentagon spokesman John Kirby said, warning that a major offensive may still be imminent in other areas of Ukraine and that the threat to Kyiv was not over.
Oil prices rebounded back up in early Asian businesses after initially tumbling on the Russian announcement, which sent WTI below $100.
There was speculation about a hefty drop in demand caused by a lockdown of more than 20 million people in Shanghai, China's biggest city, and hopes for progress in Iran's nuclear talks were also weighing on prices.
Analysts said that there was an expectation that OPEC and other major producers, including Russia, will not lift output at their monthly meeting this week, and crude remains elevated on continued worries about supplies caused by the Ukraine war.
The release of US jobs data on Friday will give traders a fresh snapshot of the world's top economy in light of the surging inflation and the uncertainty caused by war.
A strong reading could spur the Federal Reserve to act more aggressively to fight surging prices, with some commentators saying there would be several half-point interest rate hikes this year.
West Texas Intermediate: UP 0.8 percent at $105.09 per barrel.
Brent crude in the North Sea was up 0.9 percent at $111.25 per barrel.
The euro dollar is up at $1.1108 from $1.1090 late Tuesday.
The euro pound went up by 84.80 pence from 84.66 pence.
New York -- DOW: UP 1.0 percent at 35,294.