LONDON: European stocks sank and oil rebounded Thursday as key peace talks stalled between Russia and Ukraine in a rollercoaster week before a eurozone interest rate decision and key US inflation data.

Frankfurt and Milan tumbled by more than three percent, while London and Paris equities slid after surging the previous day on sliding oil prices and a glimmer of hope for an end to the Ukraine conflict.

However, crude futures rebounded after tanking Wednesday on reports that huge amounts of sanctions-hit Russian oil could be largely replaced by sourcing from elsewhere.

Investors digested news that Russian Foreign Minister Sergei Lavrov and Ukrainian counterpart Dmytro Kuleba made no progress on a ceasefire in a face-to-face meeting in the Turkish resort of Antalya.

Markets have been rocked by extreme volatility in the two weeks since Russia invaded its neighbour, sparking a wave of sanctions against Moscow.

Trading of shares in Russia's steelmaking giant Evraz, whose key shareholders include Roman Abramovich, was suspended in London after the UK slapped an asset freeze on the Russian oligarch over his alleged Kremlin links.

UK imposes asset freezes on Abramovich, Rosneft boss Sechin

It includes a halt to Abramovich's plan to sell football giants Chelsea.

Elsewhere Thursday, haven asset gold stood above $2,000 per ounce after almost striking a record on Wednesday, while other commodities that hit recent all-time highs -- including wheat and nickel -- also retreated.

No breakthrough

"The latest talks between Russia and Ukraine failed to provide breakthrough in ending the war," said ThinkMarkets analyst Fawad Razaqzada.

"Markets have reacted in the way you would expect."

The euro slid before an interest rate call from the European Central Bank, whose outlook has been upended by both Russia's assault on Ukraine and rocketing inflation fuelled by sky-high energy costs.

Markets are also on tenterhooks before vital US inflation data that could reveal the Federal Reserve's thinking ahead of a widely-expected interest rate hike next week.

Sentiment would normally be dominated by the ECB and US inflation, but war is still raging in eastern Europe.

"While these events may provide some volatility, the focus for the wider markets remains firmly fixated on Russia's invasion of Ukraine -- and whether there will be any progress in peace talks in the coming days," added Razaqzada.

Lavrov stated Moscow wanted to continue negotiations while Kuleba insisted that it would not surrender, 14 days after Russia invaded its pro-Western neighbour.

Oil attempts rebound

European benchmark Brent North Sea oil and New York's WTI gained about 4.5 percent on hopes of rising crude supplies.

Both contracts had collapsed Wednesday by more than 12 percent, with Brent hitting a low of $105.60 two days after soaring to a peak of $139 on fears over Russian oil.

The United Arab Emirates said late Wednesday that it would urge fellow states in the OPEC oil producers' cartel to boost output to plug any supply shortfall.

"Crude prices rebounded ... after being whipsawed on various Russia headlines," said Markets.com analyst Neil Wilson.

"Brent and WTI plunged yesterday in a brutal reversal as the UAE indicated it could start pumping more oil and call on friends at OPEC to do more.

"Comments from Russian and Ukrainian officials also pointed towards a path to peace, but the situation on the ground is no different."

Elsewhere, Asian equities had rallied Thursday on bargain-buying after a strong Wall Street showing.

Frankfurt and Paris soared by more than seven percent on Wednesday and London won 3.3 percent, as diving oil prices eased worries over elevated inflation.

Key figures around 1210 GMT

London - FTSE 100: DOWN 1.3 percent at 7,097.59 points

Frankfurt - DAX: DOWN 3.2 percent at 13,411.83

Paris - CAC 40: DOWN 2.7 percent at 6,214.90

EURO STOXX 50: DOWN 3.0 percent at 3,651.51

Brent North Sea crude: UP 5.0 percent at $116.66 per barrel

West Texas Intermediate: UP 4.3 percent at $113.37

Tokyo - Nikkei 225: UP 3.9 percent at 25,690.40 (close)

Hong Kong - Hang Seng Index: UP 1.3 percent at 20,890.26 (close)

Shanghai - Composite: UP 1.2 percent at 3,296.09 (close)

New York - Dow: UP 2.0 percent at 33,286.25 (close)

Euro/dollar: DOWN at $1.1040 from $1.1076 Wednesday

Pound/dollar: DOWN at $1.3160 from $1.3181

Euro/pound: DOWN at 83.86 pence from 84.03 pence

Dollar/yen: UP at 115.94 yen from 115.83 yen