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Putin comments help markets stage turnaround
Markets staged a sizeable turnaround Tuesday after Russian President Vladimir Putin sought to downplay fears that his country was intent on taking over other regions of Ukraine following the effective annexation of Crimea
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arkets staged a sizeable turnaround Tuesday after Russian President Vladimir Putin sought to downplay fears that his country was intent on taking over other regions of Ukraine following the effective annexation of Crimea.
Putin told the Russian Parliament not to believe those who say that Russia will look to take over other Ukrainian regions following Crimea.
"We don't need the division of Ukraine," he said.
Putin's address follows Sunday's referendum in Crimea, where a large majority voted in favor of joining Russia. In response, the United States and the European Union imposed limited sanctions on a number of officials they consider to have played a part in what they consider to be an unlawful referendum.
Those sanctions met with relief across financial markets as they failed to touch on Russia's vital economic interests. Putin's speech, at first glance, helped stocks eke out further gains as investors hope it's the start of a de-escalation of tensions.
"One thing Putin's comments do suggest is that the odds of this escalating further have been slashed," said Craig Erlam, market analyst at Alpari. "The West may make another attempt at sanctions but based on its first efforts, it's clearly too afraid to be overly aggressive and provoke a retaliation."
Having traded lower earlier in the session, most European markets were trading higher. Moscow's RTS index outperformed again, trading a further 1.6 percent higher following Monday's near 5 percent surge.
Elsewhere in Europe, the FTSE 100 index of leading British shares was up 0.2 percent at 6,582 while Germany's DAX rose 0.5 percent to 9,224. The CAC-40 in France was 0.8 percent higher at 4,304.
In the U.S., the Dow Jones industrial average opened 0.2 percent higher at 16,282 while the broader S&P 500 index rose the same rate to 1,862.
As well as monitoring developments in Ukraine and Russia, the focus in global markets will later be on Wednesday's policy meeting at the U.S. Federal Reserve.
Most economists predict that the Fed will continue trimming its monetary stimulus program at the pace it has already set. It is expected to cut the stimulus by $10 billion for a third time to $55 billion worth of monthly bond purchases.
Earlier in Asia, stocks pushed ahead following the advance the previous day in Europe and the U.S. The Asian heavyweight index, Tokyo's Nikkei 225, rose 0.9 percent to 14,411.27 and China's Shanghai Composite Index added 0.1 percent to 2,025.20. Hong Kong's Hang Seng gained 0.5 percent to 21,583.50.
Elsewhere, the mood was fairly subdued, with the euro down 0.2 percent at $1.3903 and the dollar 0.4 percent lower at 101.49 yen. In the oil markets, a barrel of benchmark New York crude was up 38 cents at $98.48. (**)
