European stocks climb as Russia starts returning some troops to bases; Stoxx 600 up 1%

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  • Russian Defense Ministry spokesman Igor Konashenkov was quoted as saying military units from the southern and western districts of Russia had already begun returning to their garrisons
  • Earnings remain a key driver of individual share price movement in Europe, with Glencore, Engie, Randstad and DSM among the companies reporting before the bell on Tuesday.

LONDON – European stocks jumped on Tuesday morning after the Russian Defense Ministry reportedly announced that it had begun returning some troops to deployment bases after training exercises near the Ukrainian border.

.FTSEFTSE 100*FTSE7585.253.610.71170977912
.FCHICAC 40 IndexCAC6935.9983.791.2224189134

The pan-European Stoxx 600 index climbed 1% by mid-morning, with autos adding 1.7% to lead gains as all sectors and major bourses entered positive territory.

Russian Defense Ministry spokesman Igor Konashenkov confirmed that military units from the southern and western districts of Russia had already begun returning to their garrisons, a move that could de-escalate the febrile geopolitical stand-off between Russia and the west over Ukraine.

Russian President Vladimir Putin and German Chancellor Olaf Scholz are set to hold talks in Moscow on Tuesday as diplomatic efforts ramp up. Fears that Russia could invade Ukraine in the coming days, a claim the Kremlin has repeatedly denied, had gripped markets on Monday.

The United States on Monday ordered the closure of its embassy in Kyiv and ordered the relocation of staff to the western Ukrainian city of Lviv, citing the “dramatic acceleration in the buildup of Russian forces” at Ukraine’s border.

Markets around the world have been roiled over the past week by the ratcheting up of tensions in eastern Europe and concerns that the U.S. Federal Reserve could be forced to tighten monetary policy more aggressively than hoped, following the highest annual inflation print since 1982.

Philipp Lisibach, chief global strategist at Credit Suisse, told CNBC on Tuesday that a confirmed de-escalation would give a boost to risk assets after a period of uncertainty and volatility.

“If we have, let’s say, a resolution in terms of the geopolitical issues that we currently face, I would imagine that the global economy takes a breather, risky elements of the market can certainly recover, the cyclicality and the value trade should probably do well, and European equities particularly that have come under pressure, we assume that they can continue to outperform, so we would certainly look into that angle specifically,” Lisibach said.

Earnings remain prominent in Europe, with Glencore, Engie, Randstad and DSM among the companies reporting before the bell on Tuesday.

German food delivery company Delivery Hero climbed more than 8% by mid-morning to lead the Stoxx 600 while at the bottom of the European blue chip index, Swiss banking software company Temenos fell more than 9% after missing fourth-quarter earnings expectations.

Shares in Asia-Pacific closed mixed on Tuesday before the news of withdrawal emerged. U.S. stock futures surged following the reported announcement.

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