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Global markets rebound


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Stock markets around the world have rebounded from the previous day’s slump as investors breathed a sigh of relief after Russian President Vladimir Putin declared there was “no need” yet to send troops into Ukraine.

London’s benchmark FTSE 100 index ended the day up 1.72 per cent at 6,823.77 points, Frankfurt’s DAX 30 jumped 2.46 per cent to 9,589.15 and the CAC 40 in Paris climbed 2.45 per cent to 4,395.9.

Wall Street also bolted higher, with the Dow Jones Industrial Average up 1.28 per cent to 16,375.37 points in midday trading.

The broad-based S&P 500 rose 1.33 per cent to 1,870.30, while the tech-rich Nasdaq Composite Index gained 1.72 per cent to 4,350.96.

“We’re not sure how one says ‘phew’ in Russian, yet that is a collective exclamation at this juncture,” analyst Patrick O’Hare said.

“The US stock market, therefore, is free to return to its normal course of chasing new record highs, secure in the thought that yet another worst-case scenario seems to have been averted.”

The dollar and euro also clawed back some of Monday’s losses against safe haven currency the yen as a degree of confidence returned to the market, while gold and oil prices fell from multi-month highs.

The US currency strengthened to 102.18 from 101.42 yen late in New York on Monday.

The euro edged up to $1.3736 from $1.3733 late on Monday.

Gold slid to $1,334.75 from $1,349.50 late on Monday.

“Markets have rebounded … as President Putin appeared to have cooled tensions,” said Toby Morris, a trader at CMC Markets.

The Russian stock market rallied by more than five per cent on Tuesday after plunging by more than 10 per cent the previous day.

The ruble also rose slightly after hitting recent record low rates against the euro and dollar.

World shares had mostly tumbled on Monday after Russia’s parliament voted over the weekend to allow Putin to send troops into Crimea.

It came following last month’s ousting of the pro-Russian government in Kiev of Viktor Yanukovych, after weeks of protests in the capital.

Pro-Moscow forces remain in de-facto control of Crimea – a strategic Black Sea peninsula that has housed the Russian Black Sea Fleet since the 18th century, although Putin said Russian troops had not been involved in any of their actions.

But fears of an assault by Russian forces on Ukrainian military bases surrounded in Crimea – a mainly Russian-speaking peninsula in the southeast of the ex-Soviet state – did not materialise overnight.

Ukrainian officials said on Monday that Russia had given Ukrainian soldiers in Crimea an ultimatum to surrender or face an all-out assault, although Russia denied this.

Putin also ordered Russian troops conducting training exercises near the Ukrainian border back to the barracks, but warned that: “We reserve the right to use all means to protect” Russian and Ukrainian citizens in Ukraine.

CMC Markets UK analyst Michael Hewson said investors were reassured when Putin “stated he wasn’t looking to annex the Crimea and that additional troops would only be sent into Ukraine under extreme circumstances and in observance of international law.”

Varengold Bank analyst Anita Paluch said: “After a huge sell-off, markets look a little bit relaxed, but whether the rebound is a sustained one it remains to be seen.”

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