* FTSEurofirst 300 ends 0.7 pct higher after early losses
* Putin's comments trigger relief rally
* Italy's FTSE MIB index outperforms
By Atul Prakash
LONDON, March 18 European shares changed course
to climb higher in late trading on Tuesday after comments from
Russian President Vladimir Putin eased concerns that tensions
over Ukraine will escalate.
The stock market witnessed a relief rally after Putin,
defying Ukrainian protests and Western sanctions, signed a
treaty on Tuesday making Crimea part of Russia but said he did
not plan to seize any other regions of Ukraine.
That raised expectations the market will resume its recent
rally after tumbling on the geopolitical tensions in Ukraine and
concerns about a slowdown in China.
The pan-European FTSEurofirst 300 index closed 0.7
percent higher at 1,306.11 points, recovering from an earlier
session low of 1,290.28. It fell more than 5 percent in about
one week from a near 5-1/2-year high earlier this month and is
still down 1 percent this year after surging 16 percent in 2013.
"The market has been rightly very worried that Putin's next
move was some of the other eastern provinces of Ukraine,"
Macquarie strategist Daniel McCormack said. "If he is watering
down expectations in that regard, that's obviously positive."
The biggest crisis between Russia and the United States
since the end of the Cold War is likely to keep investors
Late on Monday, the United States and the European Union
imposed personal sanctions on a handful of officials from Russia
and Ukraine who were accused of involvement in Moscow's military
seizure of the Black Sea peninsula.
"There is still a lot of uncertainty," said Frank Bonsee,
equity sales trader at ABN AMRO, adding that market could trade
sideways in the near term.
"There are still a lot of questions to be answered. What
could be the next round of sanctions? How tough that could be?"
Around Europe, Italy's FTSE MIB outperformed some
major markets and was 0.9 percent higher after hitting a
three-year peak earlier in the session as investors bet on an
economic recovery in the euro zone's periphery. Germany's DAX
also rose 0.7 percent.
"The pairs trade 'short DAX' and 'long euro zone periphery
stocks' has worked pretty well, with the MIB particularly
strong," Societe Generale's head of equity derivatives strategy
Vincent Cassot said.
On the downside, Sweden's Kinnevik, an investor
in online fashion retailer Zalando, and British clothes chain
Next fell 3.8 percent and 2.2 percent respectively after
below-expectations earnings from UK-listed ASOS
darkened the outlook for the sector.
Truck maker Scania fell 2.1 percent after board
members responsible for assessing a takeover bid by Volkswagen
for its outstanding shares said the offer was too
low and recommended that minority shareholders reject it.
Europe bourses in 2014:
Asset performance in 2014:
Today's European research round-up