Morning Chronicle - Stocks rally on China action, Ukraine hopes

Optimism over talks between Russia and Ukraine also drove the benchmark international oil contract, Brent, back under $100, analysts said.

Investors will later turn their attention to a keenly-awaited US Federal Reserve decision on raising interest rates later Wednesday to fight decades-high inflation.

Frankfurt, Paris and Milan stock markets closed more than three percent higher while London's FTSE 100 finished up 1.6 percent.

Wall Street was sharply higher at around midday.

Hong Kong's main equities index closed up more than nine percent after Chinese state media said authorities would maintain capital market stability and adopt measures to handle risks for troubled property developers.

The news lit a fire under the Hang Seng Index, where mainland Chinese tech firms had been reeling from a sell-off this year fuelled by a government crackdown on the sector and fears about possible US sanctions if China were to help Russia in its war with Ukraine.

The decision to lock down the southern Chinese tech hub of Shenzhen to fight Covid-19 had compounded the crisis for the sector.

The Hang Seng Tech Index soared by a record of more than 20 percent.

Analysts said market sentiment was lifted by Ukraine President Volodymyr Zelensky saying Tuesday that NATO membership was not on the table, in an apparent concession to Moscow.

"Today has delivered a double-whammy of gifts for embattled markets," said Chris Beauchamps, chief market analyst at IG.

"First the Chinese deputy PM hints at economic stimulus, providing a huge bounce for stocks there and giving the rest of the world hope that a sizeable economic package is on the way," he said.

"As if that wasn't enough, the Russians and Ukrainians appear to be making some progress towards a deal, including a ceasefire and Ukraine halting any lingering efforts to join NATO."

On Wednesday, however, Kyiv rejected Russian demands to impose neutrality on Ukraine, and Zelensky demanded the United States and its NATO allies impose a no-fly zone in an address to the US Congress.

"The positive disposition is being attributed to reports that Russia and Ukraine may be making progress toward some compromises," said Briefing.com analyst Patrick O'Hare.

"Everyone has heard this before only to be subsequently disappointed with headlines later in the day that dispel such notions," he said.

- Oil back under $100 -

Elsewhere, Brent seesawed above and under $100 in volatile trading.

"Oil prices are continuing to fall in the middle of the week as progress in talks between Ukraine and Russia see crude premiums being eroded," said OANDA market analyst Craig Erlam.

Fresh Covid lockdowns in China have also triggered demand concerns for the world's biggest importer of the commodity.

Hopes for an Iran nuclear deal -- which could see the country restart oil exports -- have additionally weighed on prices.

The International Energy Agency cut its 2022 oil demand outlook and warned that sanctions on Russia could spark a global supply "shock".

At the London Metal Exchange, meanwhile, nickel resumed trading after being suspended for more than a week but its return was disrupted by an IT glitch.

Nickel, used in stainless steel and electric vehicle batteries, had spiked on March 8 to a then-record high of $101,365 per tonne on a bad bet from a Chinese billionaire after Russia's invasion of Ukraine.

- Key figures around 1700 GMT -

New York - DOW: UP 0.7 percent at 33,772.30 points

London - FTSE 100: UP 1.6 percent at 7,291.68 (close)

Frankfurt - DAX: UP 3.8 percent at 14,440.74 (close)

Paris - CAC 40: UP 3.7 percent at 6,588.64 (close)

EURO STOXX 50: UP 4.1 percent at 3,889.69

Hong Kong - Hang Seng Index: UP 9.1 percent at 20,087.50 (close)

Tokyo - Nikkei 225: UP 1.6 percent at 25,762.01 (close)

Shanghai - Composite: UP 3.5 percent at 3,170.71

Brent North Sea crude: DOWN 0.7 percent at $99.18 per barrel

West Texas Intermediate: UP 0.1 percent at $96.54 per barrel

Euro/dollar: UP at $1.0995 from $1.0951 late Tuesday

Pound/dollar: UP at $1.3102 from $1.3036

Euro/pound: UP at 83.93 pence from 83.92 pence

Dollar/yen: UP at 118.57 yen from 118.33 yen

A.D.Eastaughffe--MC-UK