By Sruthi Shankar
(Reuters) – European stocks recovered some lost ground on Tuesday, following reports that some Russian troops near Ukraine were returning to their bases, while some positive corporate updates also boosted sentiment.
After opening marginally lower, the pan-European STOXX 600 index rose 1.1% after ending Monday 1.8% lower.
Stocks rallied on report that some Russian troops military districts adjacent to Ukraine are returning to their bases after completing drills, a move that could de-escalate frictions between Moscow and the West.
“The gains reflect some modest easing of tensions at the Ukrainian border, with Russian troops apparently returning to base for the time being,” said Danni Hewson, financial analyst at AJ Bell.
Investors were rattled by fears of a Russian invasion of Ukraine, driving up volatility gauges and equities sharply lower on Monday. A common gauge of volatility in euro zone equities fell to 27.2 points after hitting a three-week high of 33.95.
German Chancellor Olaf Scholz heads to Moscow on Tuesday to meet President Vladimir Putin in a high-stakes mission to avert war.
“There is an immediate risk in the next few days depending on how all this evolves,” said Punit Patel, senior equity fund manager at London and Capital.
“Geopolitical issues, certainly one that includes Russia, will provide headline risk for markets just given how sensitive the whole situation is.”
Healthcare stocks led gains, with AstraZeneca jumping 3.6% after positive updates from a late-stage trial for a treatment for prostate cancer.
UK-listed miner Glencore gained 3.1% on selling stake in Russia’s Russneft.
Randstad rose 4.5% after the recruitment firm topped market forecasts for fourth-quarter earnings.
French IT consultancy Capgemini slipped 0.2% after warning that its operating margin this year will likely be held back by inflationary pressures.
Flash reading of euro zone’s fourth-quarter GDP data and German business sentiment data for February are due later in the day.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Sherry Jacob-Phillips)
