Sawt Falasteen - Oil nears $100 but European stocks rebound on tepid sanctions

But after heavy falls at the open, European stocks bounded into positive territory as the Kremlin said it remained open to all diplomatic contact over Ukraine and Western nations held off on imposing draconian sanctions.

Market analyst Michael Hewson at CMC Markets put the rebound down "to a reluctance on the part of Western leaders to call last night’s move an outright invasion, as well as go all in, on a full range of sanctions."

Germany announced it was halting certification of the Nord Stream 2 gas pipeline from Russia and said the European Union would adopt "robust and massive" economic sanctions.

Britain slapped sanctions on five Russian banks and three billionaires, in what Prime Minister Boris Johnson called "the first barrage" of measures in response to the Kremlin's actions in Ukraine.

But analysts expected the rebound in European stock prices to be short-lived.

"Given how keyed up investors had been regarding the developments in eastern Europe, the lack of any full-on conflict in eastern Ukraine has provided the chance for markets to edge higher," said Chris Beauchamp, chief market analyst at online trading platform IG.

"But such swift bounces are a feature of declining markets, and with further developments in the crisis inevitable, the likelihood is that a headline will come along sooner or later and prompt another leg lower," he added.

And European indices indeed pulled back after President Vladimir Putin sought and got permission Tuesday to deploy its armed forces outside Russian territory.

If London finished with a marginal gain, Paris ended flat and Frankfurt shed 0.3 percent.

On Wall Street, the three main indices fell after a three-day holiday weekend, with the Dow down 0.9 percent in late morning trading.

US President Joe Biden was set to speak on the Ukraine crisis later Tuesday.

Asian stock markets had earlier ended their sessions with heavy falls.

Russia's MOEX stock index plunged eight percent at the open, having lost 10 percent Monday, but clawed back its losses and showed a 1.6 percent gain in evening trading.

- High energy prices -

Meanwhile, Brent North Sea crude oil reached $99.50 per barrel, the highest level in seven years.

At around 1630 GMT, it pulled back to under $97, still a gain of around 1.5 percent compared with late Monday.

"The intensifying crisis between Russia and Ukraine has raised concerns about the supply disruptions that would ensue as sanctions look set to cripple Russia, the world's second-largest oil exporter and the world's top natural gas producer," noted Victoria Scholar, head of investment at Interactive Investor.

"Whatever happens next, one thing is clear: energy prices are unlikely to come back down in a hurry," said ThinkMarkets analyst Fawad Razaqzada.

"Consumers’ disposable incomes have already been stretched by surging inflation, and if oil and other energy prices continue to rise, this could hurt the economic recovery, and raise concerns about a possible recession," he added.

The jump in oil prices is compounding worries about inflation around the world, with the US Federal Reserve coming under intense pressure to tighten monetary policy to prevent prices running out of control.

Haven investment gold climbed past $1,900 an ounce.

- Key figures around 1630 GMT -

New York - Dow: DOWN 0.9 percent at 33,799.33 points

EURO STOXX 50: DOWN 0.2 percent at 3,978.70

London - FTSE 100: UP 0.1 percent at 7,494.21 (close)

Frankfurt - DAX: DOWN 0.3 percent at 14,693.00 (close)

Paris - CAC 40: FLAT at 6,787.60 (close)

Tokyo - Nikkei 225: DOWN 1.7 percent at 26,449.61 (close)

Hong Kong - Hang Seng Index: DOWN 2.7 percent at 23,520.00 (close)

Shanghai - Composite: DOWN 1.0 percent at 3,457.15 (close)

Brent North Sea crude: UP 1.5 percent at $96.78 per barrel

West Texas Intermediate: UP 2.0 percent at $92.93 per barrel

Euro/dollar: UP at $1.1341 from $1.1337 late Monday

Pound/dollar: DOWN at $1.3596 from $1.3609

Euro/pound: UP at 83.44 pence from 83.33 pence

Dollar/yen: UP at 114.96 yen from 114.82 yen

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S.AbuJamous--SF-PST