European markets are rising after reports of Russian pullback
The FTSE 100 is up 1.3 per cent this morning, the Dax over one per cent and the CAC 40 1.5 per cent.
The rebound follows the sharp knocks bourses took yesterday on growing tensions in Ukraine.
Russian stocks are rallying while the rouble is bouncing back. The Micex is currently up over two per cent at 1,334.
Reports this morning that Russian troops are being sent back to there bases seems to have salved things for markets. Although Russia was calling the movement of thousands of troops into Crimea an exercise, investors worldwide have been fearful it could lead to something more serious.
But volatility remains high, with the potential for further turmoil still very much a reality.
Kit Juckes of Societe Generale:
Of course it's not ‘all over'. The economic fallout, notably in Russia, will be significant and building political stability in the Ukraine remains a huge challenge.
But financial markets are short-sighted animals and everything is calmer. Even the (very) overvalued Rouble is stronger today.
And so, risk is a lot less ‘off' than it was, EMFX is rallying across the broad, equity markets are up, Bund yields are higher, etc. In G10 FX, this means that USD/JPY has bounced back from 101, EUR/USD is edging higher again, and volatility is fading.
Ishaq Siddiqi of ETX Capital:
The question of economic collapse for Ukraine continues to weigh on sentiment as the country is now in desperate need for funding to service debts – at the moment, the IMF is in Kiev, negotiating a deal but this will undoubtedly have harsh conditions which are likely to devalue the tightly controlled Hryvnia currency.
The FTSE this morning:
Source: Google
Better news for companies
Firms with links in Ukraine are having a better time of it today. Shares in Carlsberg – a huge brewer in Ukraine and Russia – are up 2.5 per cent today, after closing five per cent down yesterday.
Raiffeisen, the Austrian bank, is up 4.2 per cent after a 10 per cent plunge yesterday. Its subsidiary, Bank Ava, makes it the fourth-largest bank in Ukraine.
And Finnish tyre makrer Nokian Renkaat, which lost seven per cent yesterday, is up three per cent this morning.