Asian equities mostly edged up Wednesday as three days of painful losses gave way to a semblance of stability, though oil prices extended gains after the United States and Britain moved to ban imports of Russian crude.

But while the panic selling that characterised markets for two weeks eased, analysts warned of further volatility as Russia showed no sign of letting up on its invasion of Ukraine.

The crisis has fuelled fears that the fragile global recovery from Covid-19 will be replaced by a period of stagflation, in which inflation surges and economies flatline or contract.

A crucial driver of equity selling has been rocketing commodities prices.

Crude is the main worry as the removal of Russia’s output will compound an already tight market. Russia is the world’s third-biggest oil producer.

Wheat and metals including nickel have already hit record highs.

Warnings that US President Joe Biden would put an embargo on imports from Russia sent Brent prices soaring to as high as $139 Monday — about $8 short of a 2008 record — before they retreated.

However, confirmation of the ban Tuesday, and news that Britain would join by the end of the year, sent the black gold roaring up again.

EU nations, which receive roughly 40 percent of their gas imports and one quarter of their oil from Russia, instead opted to set a goal of cutting their Russian gas imports by two-thirds.

In morning trade Wednesday the contract was sitting at around $129, while WTI was hovering around $125.

The announcement also shot a hole in a rally on Wall Street, with all three main indexes ending in the red.

However, most of Asia squeezed out some gains, helped by a little bargain-buying.

Tokyo, Shanghai, Singapore, Sydney, Taipei, Manila, Jakarta and Wellington all rose, though Hong Kong dipped.

– Gold edges towards record –

There was a little support from comments by Ukraine President Volodymyr Zelensky, who in an apparent nod to Moscow said he was no longer pressing for NATO membership.

He also said he was open to “compromise” on the status of two breakaway pro-Russian territories that Russian President Vladimir Putin recognised as independent just before unleashing the invasion.

“I have cooled down regarding this question a long time ago after we understood that… NATO is not prepared to accept Ukraine,” Zelensky said in an interview aired Monday night on ABC News.

“The alliance is afraid of controversial things, and confrontation with Russia.”

Putin has demanded Kyiv give up its desire to join NATO and recognise the independence of Donetsk and Lugansk.

“Markets remain volatile, unable to confidently price implications from the news flow given the complex state of the global economy,” said National Australia Bank’s Rodrigo Catril.

“Signs of a potential compromise coming from Ukraine’s president are now confronted with the reality that even if a compromise is reached, consequences from sanctions are adding another layer to supply constraint issues, logistics and many tight commodity markets, including oil, nickel, gas and so on.”

Safe-haven gold is closing in on a record high as investors rush for a hedge against soaring inflation. The yellow metal rose as high as $2,069.25 Tuesday before easing slightly.

Adding to the upward pressure was news that a cross-party group of US senators had put forward a bill to impose secondary sanctions on anyone buying or selling Russian gold, a move aimed at preventing Moscow liquidating its holdings to support the collapsing ruble.

Gold was already rising in recent weeks as inflation roared to a 40-year high in the United States, forcing the Federal Reserve to start lifting interest rates, which had been acting as a dampener on world markets.

And commentators still expect rates to rise despite the economic hit from the Ukraine war.

“The Fed doesn’t seem to be getting a break in terms of the inflation problem that they are trying to solve by raising these rates, so it doesn’t look likely that we’ll see a less aggressive Fed over the next year or so,” JoAnne Feeney, of Advisors Capital Management, told Bloomberg Television.

– Key figures around 0230 GMT –

Brent North Sea crude: UP 2.1 percent at $130.69 per barrel

West Texas Intermediate: UP 1.8 percent at $125.91

Tokyo – Nikkei 225: UP 0.7 percent at 24,973.73 (break)

Hong Kong – Hang Seng Index: DOWN 0.3 percent at 20,714.67

Shanghai – Composite: UP 0.2 percent at 3,300.89

Dollar/yen: UP at 115.85 yen from 115.69 yen on Tuesday

Euro/dollar: UP at $1.0919 from $1.0895

Pound/dollar: UP at $1.3116 from $1.3096

Euro/pound: UP at 83.26 pence from 83.17 pence

New York – Dow: DOWN 0.6 percent at 32,632.64 (close)

London – FTSE 100: UP 0.1 percent at 6,964.11 (close)