US and European stocks were on track for their best week since November 2020, wiping out nearly all losses since Russia’s invasion of Ukraine.

Wall Street’s benchmark S&P 500 stock index, which traded flat Friday, was on track to close the week about 4.9 percent higher.

Europe’s regional Stoxx 600 added 0.6 percent, bringing weekly gains to 5 percent and only a fraction below its Feb. 23 closing level, the day before Russian President Vladimir Putin launched a full-scale raid on Ukraine.

Stock markets rebounded this week on suggestions that Russia and Ukraine had made progress with a preliminary peace plan and a pledge from China’s top economic official, Liu He, for measures to boost the country’s faltering economy. Investors also said a spontaneous sell-off following the Russian invasion was fading, with money managers now taking advantage of favorable valuations in some sectors.

“We saw an outflow of panic, but now investors are in doubt,” said Bastien Drut, chief thematic macro strategist at CPR Asset Management in Paris. “The markets are starting to trade on fundamentals again.”

In Europe, the Stoxx Banks sub-index was on track to close the week up 8 percent. Shares of Dutch chip machine maker ASML, a long-time investor favorite, gained nearly 10 percent this week after falling 9 percent in the week to March 4. In the US, the share of drug manufacturer Moderna has risen by more than 25 percent in the past. seven days.

Analysts at Bank of America said Friday that after investors took $20 billion from global equity funds in the past two weeks, the rate of outflows this week has come to a “much slower pace.”

Up to $230 billion is expected to flow from bonds to equities in the coming weeks as major investors, including US pension plans, rebuild equity market positions in an effort to maintain their long-term asset allocation strategies.

The stock market moves came Friday as US President Joe Biden prepared to warn his Chinese counterpart, Xi Jinping, of retaliation if Beijing actively backs Russia in Ukraine. US Secretary of State Antony Blinken also warned there were no signs that Putin was “willing to stop the Russian invasion of his neighbor”.

“The actions we see Russia taking every day, pretty much every minute of every day, are in stark contrast to any serious diplomatic effort to end the war,” Blinken said on Thursday.

Mary Nicola, multi-asset portfolio manager at PineBridge Investments, said, “All we can expect is continued volatility.”

“The comments from China were supportive of the market,” she added. “The situation around Ukraine and Russia remains very volatile and that remains the main barrier to market sentiment.”

In Asia, Hong Kong’s Hang Seng index rose 0.4 percent lower and the CSI 300 index of Shanghai and Shenzhen-listed stocks gained 0.7 percent, recovering from steep declines earlier in the session.

Brent, the international oil benchmark, fell 0.3 percent to about $106 a barrel on Friday.

Both Brent and the US crude oil benchmark closed more than 8 percent higher on Thursday after an International Energy Agency warned that a drop in Russian crude supply to the world market could become the “biggest supply crisis in decades”.

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