Sawt Falasteen - Stocks, oil recover slightly awaiting Trump's next tariffs moves

After trillions of dollars were wiped from the combined value of global equity markets since last week, share prices across Asia and Europe battled back awaiting Wall Street's reopening.

Investors clawed back some ground as they assess the possibility of Washington tempering some of levies.

The dollar dipped against main rivals.

"After multiple punishing sessions, stock markets appear to have started their road to recovery," noted Russ Mould, investment director at AJ Bell trading group.

He warned, however, that "it's dangerous to think a massive rally will definitely happen, given how Trump is unpredictable".

Europe's main indices were up by an average of about 1.5 percent approaching the half-way stage.

European Union chief Ursula von der Leyen warned against escalating a trade conflict during a phone call with Chinese Premier Li Qiang on Tuesday.

The EU plans tariffs of up to 25 percent on US goods in retaliation for levies on metals, but will spare bourbon to shield European wine and spirits from reprisals, according to a document seen by AFP.

- Asia bounce -

Tokyo's stock market closed up more than six percent -- recovering much of Monday's drop -- after Japanese Prime Minister Shigeru Ishiba held talks with Trump.

The share price of Nippon Steel rallied by around the same amount after Trump launched a review of its proposed takeover of US Steel that was blocked by his predecessor Joe Biden.

However, the US leader's threat to hit China with an extra 50 percent tariffs -- in response to its 34 percent retaliation in kind -- ramped up the chances of a catastrophic stand-off between the two economic superpowers.

Trump said he would impose the additional levies if Beijing did not heed his warning not to push back against his barrage of tariffs.

China fired back that it would "never accept" such a move and called the potential escalation "a mistake on top of a mistake".

Hong Kong's stock market closed up by more than one percent, having plunged over 13 percent Monday, its biggest one-day retreat since 1997.

Trading in Jakarta was briefly suspended after it plunged more than nine percent in exaggerated moves following a long holiday weekend in Indonesia.

The advances followed less pain Monday on Wall Street, with the Nasdaq edging up.

The trade war has put the Federal Reserve in the spotlight as economists said escalation could send prices surging.

US central bank officials are now having to decide whether to cut interest rates to support the economy, or keep them elevated to keep a lid on inflation.

"Because the tariffs announced thus far are higher than previously expected, we think the risk is now skewed toward more rate cuts by year-end," said Nuveen chief investment officer Saira Malik.

- Key figures around 1030 GMT -

London - FTSE 100: UP 1.6 percent at 7,827.99 points

Paris - CAC 40: UP 1.0 percent at 6,998.74

Frankfurt - DAX: UP 1.2 percent at 20,021.15

Tokyo - Nikkei 225: UP 6.0 percent at 33,012.58 (close)

Hong Kong - Hang Seng Index: UP 1.5 percent at 20,127.68 (close)

Shanghai - Composite: UP 1.6 percent at 3,145.55 (close)

New York - Dow: DOWN 0.9 percent at 37,965.60 (close)

Euro/dollar: UP at $1.0934 from $1.0904 on Monday

Pound/dollar: UP at $1.2752 from $1.2723

Dollar/yen: DOWN at 146.89 yen from 147.83 yen

Euro/pound: UP at 85.73 pence from 85.68 pence

West Texas Intermediate: UP 0.4 percent at $60.95 per barrel

Brent North Sea Crude: UP 0.3 percent at $64.39 per barrel

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O.Salim--SF-PST