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(Alliance News) - European markets surged on Tuesday afternoon after the Kremlin's negotiators said Russia will reduce its military activity near Kyiv, following in negotiations with Ukraine.
The DAX 40 stock index in Frankfurt was up 3.0%, having been up by 2.0% at midday, before the announcement. The CAC 40 in Paris was up 3.4%, having previously been up 2.5%.
While London's FTSE 100 also was on track for a stellar daily gain, it was markedly outperformed by mainland European peers.
The index was up 86.50 points, or 1.2%, at 7,559.64 on Tuesday afternoon. The mid-cap FTSE 250 index was up 377.39 points, or 1.8%, to 21,447.42. The AIM All-Share index was up 5.04 points, or 0.5%, at 1,042.63.
However, the large-cap index had been up by a chunkier 97.50 points, 1.3%, at midday on Tuesday.
Share price falls for oil companies and miners held back the FTSE 100. The blue-chip benchmark in Paris, conversely, benefited from a hefty share price gain for carmaker Renault.
Oil prices struggled. A barrel of Brent fetched USD106.94 around 1400 BST, down from USD113.87 at midday and USD111.48 at the European equities close on Monday.
"The fact that Russia is going to scale back its military presence near Kyiv is excellent news, and hence we see traders backing riskier assets. As for the oil price, it has plunged and trading sharply lower because if the conflict comes to an end, we are likely to see fewer issues with Russian energy. Yes, it will not be that easy to roll back those sanctions, and traders are aware of that fact; however, there will be no further sanctions, and this is a good sign in terms of oil supply," Avatrade analyst Naeem Aslam summarised.
Gold similarly struggled. The precious metal fetched USD1,894.42 an ounce, down from USD1,914.87 at midday and USD1,937.20 at the European equities close on Monday.
Gold fell below the USD1,900 threshold for the first time in a month.
Russia will "radically" reduce its military activity in northern Ukraine, including near the capital Kyiv, after "meaningful" talks in Istanbul, Moscow's negotiators said Tuesday.
"Given that the talks on the preparation of an agreement on the neutrality and non-nuclear status of Ukraine have moved into a practical field... a decision has been made to radically, by several times reduce the military activity in the areas of Kyiv and Chernigiv," Russia's deputy defence minister Alexander Fomin said.
Chief negotiator Vladimir Medinsky said there had been a "meaningful discussion" at the talks and that Ukrainian proposals would be put to Russian President Vladimir Putin.
Ukraine's top negotiator said enough progress had been made at talks Tuesday in Turkey to resolve the conflict with Russia to enable a meeting between the presidents of the two countries.
"The results of today's meeting are sufficient for a meeting at the leaders' level," Ukrainian negotiator David Arakhamia said, raising the possibility of a meeting between Volodymyr Zelensky and Vladimir Putin that Russia had shot down as recently as Monday as being "counterproductive".
On the London Stock Exchange, miners, oil firms and defence contractor BAE Systems struggled in afternoon trading.
Miner Glencore was the worst of the lot, down 5.9%. BAE fell 4.1% and oil major BP shed 2.3%. BAE remains up 16% since the start of the invasion.
In Paris, among the better performers were those that would have been expected to struggle if the conflict was escalated further.
Renault was the best blue-chip performer there, up 9.1%. Payments firm Worldline added 8.6% and luxury retailer LVMH rose 5.5%.
Over in Frankfurt, automotive parts supplier Continental was among the best performers, up 8.7%
Stocks in New York were called higher. The Dow Jones Industrial Average and the S&P 500 were called up 0.8%, and the Nasdaq Composite was called up 1.1%.
Pre-market trading suggests New York-listed oil majors will track crude prices lower. Exxon shares were down 1.9% in pre-market trade, while Chevron was 2.0% lower.
In currency markets, the de-escalation lifted the euro.
The single currency rose to USD1.1108 on Tuesday afternoon from USD1.1052 at midday and USD1.0973 late Monday.
The euro had struggled in the wake of the invasion. It fell as low as USD1.0804 earlier in March.
Sterling was quoted at USD1.3136, up from USD1.3100 at midday and also firm against USD1.3090 late Monday. The dollar fell against the yen. The greenback fetched JPY122.93, down from at midday JPY123.54 and JPY123.32 late Monday.
By Eric Cunha; ericcunha@alliancenews.com
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