Portugal Colonial - Markets rise, oil dips after Russia sanctions but traders on edge

However, trading floors remain on edge after Russian President Vladimir Putin ordered his forces into Ukraine to secure the self-declared Donetsk and Lugansk rebel republics, with Western leaders warning that a war could break out imminently.

Global markets have been in turmoil since the move this week, with oil soaring towards the $100 mark not seen since 2014 and other commodities also hitting multi-year highs.

Wall Street, which was closed for a holiday Monday, tanked in early trade but saw a noticeable bounce after US President Joe Biden unveiled a series of sanctions against Russia.

The measures included moves against two Russian banks, cutting the country off from Western financing by targeting Moscow's sovereign debt, and penalising oligarchs and their families who are part of Putin's inner circle.

That came after a series of announcements in Europe with Germany halting certification of the lucrative Nord Stream 2 gas pipeline from Russia, while Britain targeted five banks and three billionaires.

Canada, Japan and Australia have since followed up with their own punishments.

The sanctions were not as bad as feared -- crucially not aiming at Russia's crude exports -- providing some much-needed breathing room for investors and halting the surge in oil prices that has seen both main contracts pile on more than 20 percent so far this year.

Brent, which touched $99.50 on Tuesday, and WTI were slightly lower in Asia.

- 'Considerable risk' -

However, Biden said the moves were only a "first tranche" in response to Putin's "carving out a big chunk of Ukraine", and more penalties could follow if he does not change course.

"There's still considerable risk that oil prices may surge above $100 a barrel" if the situation escalates, said Vivek Dhar at Commonwealth Bank of Australia.

"Oil markets are particularly vulnerable at the moment given that global oil stockpiles are at seven‑year lows and that OPEC+ spare capacity is being questioned due to disappointing OPEC+ supply growth."

On Wednesday, Hong Kong, Shanghai, Sydney, Seoul, Singapore, Wellington, Taipei, Mumbai and Jakarta were all in positive territory. Bangkok and Manila slipped. Tokyo was closed for a holiday.

The crisis comes just as investors prepare for a series of interest rate hikes by the US Federal Reserve as it tries to rein in 40-year-high inflation.

Commentators say that while a March hike is baked in, forecasts for further increases this year are being affected by events in Europe as officials try to assess the impact on the economy.

"How the Federal Reserve wants to handle that particular issue is really the issue that feeds through to US markets and the broader world," Steven Wieting, of Citigroup Private Bank, said on Bloomberg Television.

OANDA's Jeffrey Halley added: "Markets will likely bubble along sideways now until we see Mr Putin's next move.

"But I have no doubt that Russia/Ukraine still have the potential to deliver a stagflationary shock to the rest of the world if it escalates and oil prices spike to above $130.00 a barrel.

"That would leave many central banks having to... halt monetary normalisation just as inflationary pressures intensified sharply."

- Key figures around 0710 GMT -

Hong Kong - Hang Seng Index: UP 0.7 percent at 23,682.07

Shanghai - Composite: UP 0.9 percent at 3,489.15 (close)

Tokyo - Nikkei 225: Closed for a holiday

West Texas Intermediate: DOWN 0.3 percent at $91.67 per barrel

Brent North Sea crude: DOWN 0.2 percent at $96.66 per barrel

Euro/dollar: DOWN at $1.1326 from $1.1330 late Tuesday

Pound/dollar: UP at $1.3595 from $1.3588

Euro/pound: DOWN at 83.30 pence from 83.35 pence

Dollar/yen: DOWN at 115.05 yen from 115.08 yen

New York - Dow: DOWN 1.4 percent at 33,596.61 (close)

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

M.Carneiro--PC