By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets turned higher on
Tuesday after Russian President Vladimir Putin signaled he doesn't
want to split Ukraine, easing tensions in the crisis that has kept
investors on edge recently.
The Stoxx Europe 600 index added 0.6% to close at 327.93,
building on a 1.1% rally from Monday, which marked its biggest
advance in almost two weeks. U.S. stocks also traded higher on Wall
Street.
Banks helped lift the pan-European benchmark, with shares of
Intesa Sanpaolo SpA up 3.2% in Milan, BNP Paribas SA up 1.8% in
Paris and Banco Santander SA 1.3% higher in Madrid.
Shares of Metro AG picked up 3.8% after the German retailer said
it has pushed back plans for an initial public offering of its
Russian Cash & Carry business due to the political uncertainty
in Russia and Ukraine.
On a more downbeat note, shares of Cairn Energy PLC slid 14%
after the India-focused oil and gas explorer said impairment
charges pushed it to a net loss for 2013. It also suspended a
share-buyback program until a tax claim in India is resolved.
Shares of Scania AB fell 2.1% after an independent committee
formed to assess Volkswagen AG's bid for the Swedish truck maker
recommended that Scania shareholders reject the offer. Volkswagen
shares rose 0.1%.
Resolution Ltd. slumped 5.9% after the insurance firm swung to
profit but said founders Clive Cowdery and John Tiner will step
down. The founders steered the company through a restructuring
phase that is now complete.
Putin speech
More broadly, European stock indexes reversed midday after Putin
said Russia wishes no harm to Ukraine and isn't seeking a partition
of the country. Some analysts were worried that Russia would try
and take over larger parts of Ukraine after gaining control of the
Crimea region. Putin also signed a treaty to annex Crimea, brushing
off Western sanctions.
The EU and the U.S. on Monday imposed visa bans and asset
freezes on Russian and Crimean officials after a referendum over
the weekend showed an overwhelming majority of Crimea's population
voted in favor of rejoining Russia. The referendum was deemed
illegal by the Ukrainian government in Kiev, the U.S. and the
EU.
Ahead of the referendum, European stock markets sold off
sharply, but with tensions appearing to ease on Tuesday markets
should turn back to more familiar matters, such as earnings
surprises, said David White, trader at Spreadex, in a note. He
explained that the Ukraine jitters were largely an excuse for
traders to book some profits after a period of solid returns for
risk assets.
"What we should see now is business as usual. The market will,
while keeping an eye on further developments, turn to the Fed for
their guidance on rates and asset purchases," he said.
The U.S. Federal Open Market Committee concludes a two-day
meeting on Wednesday, with Chairwoman Janet Yellen holding her
first news conference as Fed chief.
Indexes end broadly higher
In Tuesday's trade, Russia's MICEX Index rallied 3.9% to
1,335.34.
Elsewhere in Europe, Germany's DAX 30 index picked up 0.7% to
9,242.55, while France's CAC 40 index jumped 1% to 4,313.26. The
U.K.'s FTSE 100 index added 0.6% to 6,605.28.
Aside from the Ukraine-Russia standoff, the markets looked to
fresh macroeconomic data on the euro zone. Eurostat said the
currency union had a surplus in their trade of goods with the rest
of the world in January, an indication that the region's economic
recovery continued at the start of the year.
Investors also digested the March ZEW survey that measures
German investor confidence. The indicator of economic sentiment
slid 9.1 points to 46.6, missing analyst expectations of 52 and
marking a third straight month on the decline. ZEW President
Clemens Fuest said the "Crimea crisis is weighing on experts'
economic expectations for Germany," but stressed that the economic
upswing is not at risk.
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