* FTSEurofirst 300 rises 1.7 pct
* Euro STOXX 50 climbs 2.2 pct
* Both indexes had fallen sharply on Monday
* Prospect of de-escalation in Ukraine dispute lifts stocks
* Banks and Glencore among top performers
By Sudip Kar-Gupta
LONDON, March 4 European shares rebounded on
Tuesday from losses in the previous session, with banks and
mining company Glencore among top performers, on
tentative signs belligerence between Ukraine and Russia was
The pan-European FTSEurofirst 300 index, which fell
2.2 percent on Monday, bounced back by 1.7 percent to 1,340.03
points - around 1 percent below its 2014 peak of 1,353.47 points
in late January, its highest since May 2008.
The euro zone's blue-chip Euro STOXX 50 index,
whose 3 percent fall on Monday was its worst decline since June
20 last year, also rebounded, by 2.2 percent, to 3,119.77
Global equities fell sharply on Monday after Russian troops
seized control of key locations in Ukraine's Crimea. But they
recovered on Tuesday, as Russian President Vladimir Putin
ordered troops on exercises in western Russia back to base in an
apparent effort to ease East-West tension over Ukraine.
"It's still a very worrying situation, but the situation
seems to have calmed down a bit. That's why we're seeing a bit
of a recovery," said Scott Meech, co-head of European equities
at Union Bancaire Privee (UBP).
Meech said he felt the backdrop of a gradual recovery in
European company earnings and the European economy remained
intact, in spite of the hit to markets caused by Ukraine.
"The fundamentals are still pretty good, and I think the
right instinct is to buy any weakness in the market," he said.
BANKING STOCKS RECOVER
Glencore Xstrata rose 2.5 percent to provide one of the
biggest boosts to the FTSEurofirst 300, index after it posted
core profits above market forecasts.
Banks also recovered from a fall on Monday caused by worries
over the exposure of some lenders to Ukraine and Russia. The
STOXX Europe 600 Banking Index rose by 1.8 percent.
Banks and European equities in general were also buoyed by
speculation that the European Central Bank may loosen lending
conditions on Thursday, after ECB President Mario Draghi said
late on Monday that inflation in the euro zone was "way below"
the ECB's goal.
Some analysts also stressed that the market swings triggered
by the tensions in Ukraine should be seen in the context of a
broad stock market rally over the last year. The FTSEurofirst
300 is up nearly 2 percent since the start of 2014 after gaining
16 percent last year.
John Surplice, European equities fund manager at Invesco,
backed banks as one of his favoured sectors for this year.
"It is important to remember that the bank sector has
earnings that are more sensitive to economic growth than any
other sector," Surplice said. "So, as the economy improves, you
are going to get this reflected in upside to earnings estimates
for the banking sector