Portugal Colonial - European stocks steady after Ukraine-induced volatility

Asian stock markets mirrored strong rebounds on Wall Street and across Europe seen Tuesday on hopes Russia would not invade Ukraine after Moscow said some of its troops on the countries' border were pulling back.

"The withdrawal of some Russian troops seems to have been accompanied by comments that the door remained open for diplomatic discussions, which was sufficient to prompt a relief rally," noted Richard Hunter, head of markets at Interactive Investor.

"On the other hand, the current elevated level of inflation remains a real concern."

UK annual inflation has hit the highest level since 1992, official data showed Wednesday, adding pressure to the cost of living and on the Bank of England to keep raising rates.

The prospect of higher BoE borrowing costs lent some support to the pound.

Global inflation has reached heights not seen in decades, largely owing to a surge in energy prices as economies reopen from pandemic lockdowns.

World oil prices this week struck the highest levels since 2014, as investors grow increasingly worried about energy supplies in the event of a war between major producer Russia and Ukraine.

Crude futures were back on the rise again Wednesday after tumbling Tuesday on easing conflict fears.

Observers have warned that oil could soon break above $100 per barrel.

"Volatility and uncertainty is just going to be heightened. That can be due to Russia-Ukraine, it could be due to stubborn inflation," Brenda O'Connor Juanas at UBS told Bloomberg Television.

US producer prices rose twice as much as expected in January, firming expectations that the Federal Reserve will from next month begin a series of US interest rate hikes.

"Americans expect inflation to eventually ease next year, but they are growing nervous the peak could be far worse than they initially expected," said Edward Moya, analyst at Oanda trading group.

Investors are awaiting the release of minutes from the Fed's January policy meeting, hoping it will provide clues about the pace and timing of rate hikes.

While the European Central Bank is sitting tight for now, it should start thinking about gradually withdrawing economic stimulus measures, as the risk of acting "too late" against soaring inflation grows, an ECB policymaker has told the Financial Times.

The comments late Tuesday by Isabel Schnabel, a member of the ECB's executive board, comes as the eurozone experiences record-high annual inflation at 5.1 percent.

- Key figures around 1200 GMT -

London - FTSE 100: DOWN 0.2 percent at 7,592.64 points

Frankfurt - DAX: UP 0.1 percent at 15,430.84

Paris - CAC 40: UP 0.1 percent at 6,984.97

EURO STOXX 50: UP 0.2 percent at 4,151.22

Tokyo - Nikkei 225: UP 2.2 percent at 27,460.40 (close)

Hong Kong - Hang Seng Index: UP 1.3 percent at 24,675.63 (close)

Shanghai - Composite: UP 0.6 percent at 3,456.83 (close)

New York - Dow: UP 1.2 percent at 34,988.84 (close)

Brent North Sea crude: UP 1.5 percent at $94.65 per barrel

West Texas Intermediate: UP 1.0 percent at $93.03 per barrel

Euro/dollar: UP at $1.1386 from $1.1361 late Tuesday

Pound/dollar: UP at $1.3566 from $1.3541

Euro/pound: UP at 83.93 pence from 83.88 pence

Dollar/yen: UP at 115.67 yen from 115.62 yen

J.Pereira--PC