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Reuters
European shares staged a late rebound yesterday as the Russian rouble recovered a good chunk of the day’s losses against the dollar and oil prices also gained ground.
Traders pointed to comments by US Secretary of State John Kerry, who said Russia had made constructive moves towards possibly reducing tensions in Ukraine.
The FTSEurofirst 300 index of pan-European shares closed 1.8% higher at 1,314.31 points after trading as low as 1,273.2 earlier in the day. It mirrored a bounce in oil prices and a recovery in the rouble against the dollar.
Trading volume on the FTSEurofirst 300 was nearly 80% higher than the index’s average for the past three months.
Among major markets, London’s benchmark FTSE 100 index rose to 2.41% to 6,331.83 points; Paris CAC 40 rose 2.19% to 4,093.20 points and Frankfurt’s DAX 30 gained 2.46% to 9,563.89 points.
With Western economic sanctions and falling oil prices crippling the Russian economy, Kerry’s comments were seen as a sign relations between the US and Russia might become more constructive.
“John Kerry...made all the difference,” Justin Haque, a trader at Hobart Capital, said.
Other traders said the rebound may have been a technical one, with many key indexes looking oversold after a volatile trading session in the wake of Russia’s huge emergency interest-rate hike.
Positioning ahead of oil options later in the day and equity options on Friday was also cited as a factor magnifying the late market bounce.
“It’s all very false, so be careful not to read too much into it,” Andy Ash, head of sales at
Monument Securities, said.
Shares in European companies exposed to Russia still fell sharply.
Raiffeisen Bank International, which relies on Russia for profits, hit a record low before closing 9.4% lower.
Brewer Carlsberg slumped 6.5% and hit a 2 1/2-year trough while German retailer Metro fell 1%.
Elsewhere, Orange was up 3.7% and Deutsche Telekom rose 3.1% after the two firms entered exclusive talks with BT for a potential 12.5bn-pound ($19.6bn) sale of EE.
BT shares were up 1.9%.
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