* FTSE 100 up 1.5 pct, recoups Monday's entire losses
* Ease in geopolitical tension triggers relief rally
* Ashtead, Glencore surge; Fresnillo slips
By Atul Prakash
LONDON, March 4 (Reuters) - Britain's top share index bounced back from two-week lows on Tuesday following what investors saw as a de-escalation of Russia-Ukraine tensions and as some robust earnings updates attracted bargain hunters.
The index was up 1.5 percent at 6,811.17 points, recovering all its losses from Monday.
Investors still remained cautious in placing strong bets on the sustainability of the share rally, however, given Russia and the West remain at loggerheads over the former's intentions in Ukraine.
Russian President Vladimir Putin gave orders to end an army exercise on Tuesday and later said in a news conference that the use of force by Russia in Ukraine was a choice of "last resort".
He added, however, that Russia reserved the right to intervene if there was "lawlessness" in Russian-speaking eastern Ukraine.
"Some signs of easing in geopolitical tensions have triggered a modest relief rally in the market," Robert Parkes, equity strategist, HSBC Securities, said.
"Geopolitical issues aside, investors' main focus remains on the performance of the corporate sector. There are some signs of life from this reporting season and we do see the earnings picture improving from here."
Equipment hire group Ashtead spiked 9.2 percent to the top of FTSE 100 gainers after a 51 percent jump in third-quarter profits and raising its full-year profit target.
Natural resources firm Glencore Xstrata rose 2.5 percent on forecast-beating core profit on strong trading.
But Mexican miner Fresnillo slumped 8.7 percent after reporting a 64 percent drop in pre-tax profit.
Lex van Dam, hedge fund manager at Hampstead Capital, said he believed the short-term direction of the market would be higher because the world's superpowers had nothing to gain from a conflict over Ukraine and so the situation was not likely to escalate.
Analysts stressed that the market swings triggered by the tensions in Ukraine should be seen in the context of the recent market rally, which has seen the UK benchmark index bounce nearly 6 percent off lows hit at the start of February.
That has left the FTSE 100 trading on a 12-month forward price/earnings ratio of 13.6 times, against 12.9 times at the beginning of February, Thomson Reuters Datastream shows.
"Equity valuations are back up at the top of their recent range so when you get a left-field shock the impact is more dramatic than it would have been if we hadn't had that run," Peel Hunt equity strategist Ian Williams said.