Asian shares track Wall St rally; markets eye long-term Ukraine risk

SINGAPORE (Reuters) - Asian shares regained ground on Friday, following Wall Street's overnight lead as U.S. President Joe Biden hit back at Russia with harsh sanctions after it unleashed troops, tanks and missiles on Ukraine.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.68%, while Japan's Nikkei was trading up 1.53% and Hong Kong's Hang Seng index added 0.16%. Australian shares added 0.3%, driven by a rebound in tech stocks.

Investors rediscovered their risk appetite overnight after some initial sharp losses, with major U.S. indices posting gains on Wall Street on Thursday, lead by tech stocks.

However, U.S. share futures slipped in early Asian trade, with S&P500 e-mini futures losing 0.61% and Nasdaq futures down 0.92%.

Analysts worry any rallies might be fleeting.

"Biden's sanctions and reluctance to pour troops in is providing some relief. But this conflict is going to be a protracted issue and add to global inflationary pressures that will keep central banks on track for tightening," said Kyle Rodda, analyst at IG Markets in Melbourne.

"It's okay for now, but in the long-term the market will be tracking to the downside," he said.

Oil prices, which jumped when the Russian invasion began on Thursday before falling back, rose again on Friday on worries about supply disruptions. Brent crude futures were up 2% at $101.20 a barrel, while U.S. West Texas Intermediate (WTI) crude also rose to $94.46, although both benchmarks were off their highs.

Spot gold, however, fell 0.4% to $1,910.96 per ounce, having earlier touched its highest level since September 2020 at $1,973.96 as investors sought safe haven.

The yield on 10-year U.S. Treasuries was at 1.95% after an initial slide to 1.84% on Thursday, its biggest daily drop since late November.

The U.S. dollar index, which measures the greenback against a basket of major currencies, eased 0.12% to 96.98, having risen on Thursday to levels last seen during the first wave of the coronavirus pandemic. The Russian rouble was at 83.43 against the dollar, clawing back from a record low of 89.986.

Ukrainian President Volodymyr Zelenskyy said late on Thursday a new iron curtain was descending over Europe.

Ukrainian soldiers battled Russian troops as they poured in from three sides while about 100,000 people fled their homes, according to the United Nations, many hunkering down in basements and subway stations to escape shelling. Ukrainian authorities said 137 people had been killed on the first day of fighting.

Western nations redoubled their efforts to crimp Russia's ability to do business, freezing bank assets and cutting off state-owned enterprises. But they stopped short of disconnecting Russia from the SWIFT international banking system or targeting oil and gas, which some analysts said had helped markets to recover.

On Thursday, the Dow Jones Industrial Average closed up 92.07 points, or 0.28%, at 33,223.83 while the S&P 500 gained 63.2 points, or 1.50%, to 4,288.7 and the Nasdaq Composite added 436.10 points, or 3.34%, to 13,473.59.