LONDON — European stocks closed higher on Tuesday as another round of talks between Ukraine and Russia began.
The pan-European Stoxx 600 closed up 1.7%, with autos climbing 5.9% to lead the gains, with all sectors trading in positive territory except for basic resources and oil & gas, which fell 2.2% and 1.9% respectively.
In terms of the evolution of the individual share price, the French automotive supplier Faurecia added 17% to lead the Stoxx 600 amid a rally in auto stocks. In contrast to the benchmark, the German chemical company K+S fell more than 10%.
The gains in Europe came as investors in the region remained focused on developments in Russia’s invasion of Ukraine. One-on-one talks between the two sides resumed in Turkey on Tuesday.
Markets extended their gains on Tuesday afternoon as Turkish Foreign Minister Mevlut Cavusoglu said the talks resulted in the most significant progress yet.
Russia’s deputy defense minister said after the talks that Russia had decided to drastically reduce its military activity centered on Kyiv and Chernihiv, according to Reuters, while Ukrainian negotiators offered to adopt neutral status in exchange security guarantees.
Ukrainian officials said they would not open any humanitarian corridors on Monday to allow the evacuation of civilians in light of intelligence suggesting Russian forces may be planning an attack on the evacuation routes.
With bond markets particularly feverish at present and equities around the world rising despite continued uncertainty around Ukraine and inflation, the TINA approach (there is no alternative) for stocks could be in play, suggested James Athey, chief investment officer at Abrdn.
“The psychological factor cannot be underestimated. Equity investors have for at least a decade, if not longer, been rewarded for buying every dip, and this Pavlovian response is hard to combat,” Athey told “ Street Signs Europe” from CNBC. .
“It will slow down and it will stop when investors lose money in this strategy and again, so far they haven’t really done that.”
Elsewhere, U.S. stocks rose on Monday as investors looked to take advantage of two straight weeks of gains. Traders are watching a slew of key economic reports, while keeping an eye on the Federal Reserve’s planned interest rate hikes.
Tuesday’s job vacancies and labor turnover survey showed 11.3 million job vacancies, more than the 11.1 million expected. The ADP will also release its private payrolls data ahead of the closely watched monthly jobs report on Friday.
CNBC’s coverage of the Atlantic Council’s World Energy Forum continues on Tuesday and CNBC will host panels with key business leaders including Regina Mayor, KPMG Global Energy Head Larry Fink , CEO of BlackRock and Leo Simonovich, Vice President and Global Head of Industrial Cyber and Digital Security at Siemens Energy.
On Monday, the UAE’s energy minister told CNBC at the forum that Russia will still be part of OPEC+ even if governments shun Moscow because of the war in Ukraine.
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