Shreyashi Sanyal and Sruthi Chankar

(Reuters) – European stocks closed higher than two weeks after new talks between Russia and Ukraine. Gains were accelerated by China’s commitment to provide more economic stimulus.

Moscow and Kyiv met to discuss Ukraine’s status outside NATO. This raised hopes of a breakthrough following three weeks of fighting.

The pan-European index ended up 3.1% at its highest level in three years, since February 28, 2008.

China’s Vice-Premier Liu He stated that Beijing will continue to take steps to improve the Chinese economy and provide favourable policies for capital markets. Markets rose also.

Chris Beauchamp of online trading platform IG, said that “Today has delivered a double whammy” for struggling markets.

Stocks will continue to benefit from news headlines about China and reports on Ukraine, which has led to a remarkable rise in risk appetite.

After hitting record lows during the last session, Prosus (OTC) – a Dutch tech investor – saw its stock surge nearly 23.9%. This stock led the technology index by nearly 6.6%.

Others China-exposed industries like autos and miners rose by 5.2% and 3.6%, respectively. Luxury stocks LVMH (Richemont), and Hermes also saw a rise in China-related revenue. They were between 4.8%-7.8%.

Inflation fears have been raised by the Ukraine crisis, which saw crude oil prices surpass $139 per barrel.

Investors are concerned about the potential for central banks to tighten their belts and tame inflation, even though crude oil prices trade at $102 per barrel.

It is expected that the U.S. Federal Reserve will increase interest rates by 25 basis point when it announces its policy decision on Wednesday at 1800 GMT.

Investors will pay close attention to the latest quarterly economic and rate projections. This is the first tangible guidance on how the Ukraine crisis and inflation have influenced policymakers.

EQT, a Sweden-based private equity firm (NYSE:), surged 11.9% when it announced that it has agreed to purchase investment firm Baring Private Equity Asia in a deal valued at 6.8 billion Euros ($7.5 billion).

BMW, a German automaker, gained 4.1% despite lower profit margins for its automobile segment in 2022 because of the conflict in Ukraine.