Asian equities rallied Thursday following a strong bounce on Wall Street and a breathtaking surge in Europe sparked by a plunge in oil prices and bargain-buying following a Ukraine-fueled rout.

A glimmer of hope for peace talks provided some much-needed support to asset markets, which have been in the grip of extreme volatility in the past two weeks.

The Dow jumped two percent, the S&P 500 even more and the tech-heavy Nasdaq an impressive 3.6 percent.

The benchmark Shanghai Composite Index was up 1.2 percent, closing at 3,296.09 on Thursday.

Hong Kong's Hang Seng Index was up 1.3 percent at 20,890.26.

The Nikkei 225 in Japan jumped 3.9 percent to close at 25,690.40.

A key driver of the advance was a massive drop in oil prices, which provided some relief to traders worried about already high inflation being sent even higher.

Brent at one point dropped to as low as $105.60, having hit a peak of $139 two days before, on hopes that the huge amounts of Russian oil taken out of the market by sanctions could be largely replaced by sourcing from elsewhere.

The United Arab Emirates said Wednesday it would urge fellow states in the OPEC oil producers' cartel to boost output, while U.S. talks with massive producer Venezuela appeared to be making progress.

At the same time Iraq has said it could lift output and nuclear talks with Iran were also showing signs of bearing fruit.

Gold, a safe-haven asset in times of turmoil, fell back below $2,000, having almost hit a record on Wednesday, and other commodities that have hit all-time highs – including wheat and nickel – also retreated.