Asian shares have rebounded as investors take stock of sanctions on Russia following its actions in Ukraine.
US President Joe Biden has brought in measures intended to obstruct Russia’s ability to do business in the world’s major currencies.
Agreements to buy shares on major Wall Street indexes fell, with futures of the S&P 500 index slipping 0.4%.
The price of Brent crude oil remained above $100 (£75) a barrel.
While the sanctions on Russia by the US and its Western allies are “relatively limited”, more severe measures are being drawn up, British asset manager Schroders noted.
“The threat of sanctions does not appear to have deterred Russian incursion,” said Tom Wilson, its head of emerging market equities.
“However, an invasion may drive a more robust and sustained Western response,” he added.
Indexes rebounded across Asia and Tokyo’s Nikkei 225 index closed nearly 2% higher on Friday.
South Korea’s Kospi rose 1.1%, while the Shanghai Composite added 0.6%.
Some analysts said the sanctions by the US, Europe and a number of other countries were not as strong as markets had feared.
Global share indexes fell sharply on Thursday after Russian President Vladimir Putin declared a “special military operation” in Ukraine’s Donbas region.
However a rally after Mr Biden’s announcement meant US indexes finished higher.
Meanwhile, Britain’s FTSE 100 index fell 3.9%, its biggest one-day fall since June 2020. It was set to open up 1.3% on Friday.
Europe was however positioned for a mixed trading session.
Oil had surged to its highest level in more than seven years on Thursday, and Brent prices then slipped but remained above $100 a barrel.
While Western sanctions included freezing bank assets and cutting off state-owned enterprises they stopped short of disconnecting Russia from the Swift international banking system or targeting its oil and gas exports, which some analysts said had helped markets rebound.
Russia is the second largest exporter of crude oil after Saudi Arabia. It is also the world’s biggest exporter of natural gas.
Europe gets nearly a third of its oil and around 40% of its gas from Russia, much of it flowing through pipelines across Ukrainian territory.
But concerns remain that sanctions could constrict supplies and drive up prices worldwide.
Washington has not yet taken steps to disrupt Russia’s energy supplies, said Mansoor Mohi-uddin, chief economist at the Bank of Singapore.
“The situation remains highly fluid. As civilian casualties emerge, the pressure on the US, UK, European Union and Nato to help Ukraine defend its territory will increase,” he added.
However, the amount of global reliance on Russian energy is uneven.
China, which has opposed Russia sanctions, gets 14% of the oil and gas that it imports from the country, compared to India and Thailand’s 2%, according to economists at Deutsche Bank.
“Perhaps the greatest source of spill over from the Ukraine conflict would be the impact that conflict, and higher energy prices, would have the European economies,” they said.
“If oil prices were to rise 50%, the Euro Area would fall into recession – we think the US might too. All Asian countries would feel the impact of that disruption,” they added.
