LONDON MARKETS: FTSE 100 Rises 1.7% As Ukraine Tensions Ease

By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- Following a sharp prior-day loss, U.K. stocks moved firmly higher on Tuesday as tensions between Ukraine and Russia appeared to ease after Russian troops reportedly were ordered back to their bases and President Vladimir Putin said he wouldn't use military force yet.

The FTSE 100 index gained 1.7% to close at 6,823.77, recouping a 1.5% loss from Monday.

The U.K. benchmark followed a positive trend seen in European and U.S. equities, triggered by developments in the Ukraine/Russia crisis. International financial markets were rattled on Monday after Putin over the weekend got parliamentary approval to launch a military intervention in Ukraine.

Tensions seemed to ease on Tuesday, however, after Russian troops sent on surprise military exercises in western and central Russia reportedly were ordered to return to their bases

Additionally, Putin said in a televised press conference that he sees "no need yet" to send troops to Ukraine, but that the use of military forces remains an option in an "extreme case."

Banks, which were hit hard in Monday's session, posted some of the biggest gains on Tuesday. Shares of Royal Bank of Scotland Group PLC (RBS) rose 2.5%, Barclays PLC (BCS) picked up 2.1%, and sector heavyweight HSBC Holdings PLC (HSBC) advanced 1.5%.

Shares of Ashtead Group PLC jumped 13% after the equipment-rental company reported a 54% rise in third-quarter pretax profit.

Also rising, shares of Glencore Xstrata PLC (GLCNF) put on 1.7% after the miner said it swung to a full-year loss, but reported its closely watched adjusted earnings before interest and taxes rose 34%.

Precious miners headed south, as gold and silver prices lost momentum on the latest developments in Ukraine. Shares of Randgold Resources Ltd. lost 1.5%, and Fresnillo PLC slid 4.7%. Fresnillo also reported a 70% drop in full-year profit.

On the data front in the U.K., the Markit/CIPS construction purchasing managers index showed activity in the sector increased for a 10th month in a row in February. The construction PMI came in at 62.6, down from a 77-month high of 64.6 in January. A level above 50 signals expansion.

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