• Asian markets have broadly advanced, with Japan's Nikkei 225 leading gains at 1.3%, buoyed by potential Ukraine peace talks.
  • Oil prices declined following the Trump-Putin dialogue, providing relief to market concerns despite higher U.S. inflation data.
  • Federal Reserve rate cut expectations shift as January inflation hits 3%, exceeding forecasts and December's 2.9% rate.

Asian markets shares displayed strong performance on Thursday, primarily driven by optimism following US President Donald Trump's agreement with Russian leader Vladimir Putin to initiate talks aimed at ending the Ukraine conflict.

The positive sentiment persisted despite concerning inflation data from the United States.

Japan's Nikkei 225 emerged as the standout performer, jumping 1.3% to 39,474.80, while other major Asian indices followed suit.

The Hang Seng and South Korea's Kospi both gained 0.9%, and Australia's S&P/ASX200 added 0.2%.

The Shanghai Composite was the only major index to decline, edging down 0.2%.

The upbeat Asian performance contrasted sharply with Wall Street's previous session, where markets declined following worrisome U.S. inflation data.

The S&P 500 dropped 0.3%, while the Dow Jones Industrial Average fell by 225 points.

However, market losses were partially offset by falling oil prices, with benchmark U.S. crude declining below $72 per barrel after Trump announced Ukraine negotiations.

The U.S. inflation report revealed a 3% increase in January, exceeding December's 2.9% rate and raising concerns about the Federal Reserve's interest rate strategy.

This data has led some investors to bet against any rate cuts in 2025, with trading data showing a 29% probability of rates remaining unchanged throughout the year.

The inflation concerns have pushed the 10-year Treasury yield up to 4.62%, creating additional pressure on U.S. stock valuations.

The impact was particularly evident in energy sectors, with companies like Exxon Mobil experiencing significant declines as oil prices retreated.

In currency markets, the dollar showed slight weakness against major peers, trading at 154.22 yen and $1.0404 against the euro, reflecting the complex interplay of geopolitical developments and monetary policy expectations.

Edited By Annette George