Shares wilt as investors see scant hope on Russia-Ukraine talks

A rally for shares wilted on Thursday as analysts warned of further pain for stocks with no immediate end in sight to the war in Ukraine, even after planned diplomatic talks between Moscow and Kyiv had lent momentum to riskier bets.

According to Reuters, European stocks fell 1.7%, with indexes in Germany (.GDAXI) and Britain (.FTSE) losing 1.9% and 0.9% respectively, a reversal after futures gauges had suggested slim gains in early trade. Automakers (.SXEP) suffered the most, falling 0.9%.

Foreign ministers from Russia and Ukraine will meet in Turkey on Thursday in the first high-level talks between the two countries since Moscow invaded its neighbour, with Ankara hoping they could mark a turning point in the conflict.

The prospect of talks had buoyed MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) by 1.8%, with Tokyo (.N225) adding 3.9%, its best day since June 2020.

Still, the euro also held on to most of its gains from its steepest daily jump in almost six years ahead of a European Central Bank meeting likely to shed light on the bloc’s monetary and fiscal response to Russia’s invasion.

The single currency was last down 0.3% at $1.1046.

Other EU talks were due, with leaders set to hold initial discussions at a summit starting on Thursday evening about a joint investment plan to boost the bloc’s independence in defence and energy.

U.S. inflation figures are also due, which could further guide expectations for the Federal Reserve’s meeting next week.