Stocks in Europe were still in positive territory come midday following reports that an agreement reached overnight between Russia and Ukraine on human corridors to evacuate civilians from combat zones was holding.
That was despite a threat from Russia, also overnight, that it might cut gas supplies to the continent if proposals for a ban on its exports of oil and gas went ahead.
Commenting on the situation in markets and the geopolitical backdrop, strategists at Bank of America said: “There is no clear off-ramp for Russia. Our base case assumes months of uncertainty, tough sanctions and high energy prices.
“Forecasting the impact of the Russian invasion is like catching a falling knife. Expert opinion has been repeatedly wrong about the course of events. If we believe the experts, Putin would have never invaded, Ukraine would have offered weak resistance and sanctions would be limited.”
As of noon, the pan-regional Stoxx 600 was 0.18% higher at 417.76, although it had come off its earlier highs. The Frankfurt Dax was adding 0.69% to 12,921.99 while Milan’s FTSE Mib was up by 2.33% to 22,675.38.
Front-dated Brent crude oil futures were again moving higher, adding 3.57% to reach $127.61 a barrel, after Shell, having come under considerable pressure, announced that it would start phasing out purchases of Russian oil and gas.
Nevertheless, the company added that it might take weeks to wean itself off of Russian crude.
Overnight, Russian Deputy Prime Minister Alexander Novak said Moscow could cut gas supplies via the existing Nord Stream 1 pipeline to Germany.
Novak argued that Moscow had the right to “mirror” the penalties imposed on its economy.
On a more hopeful note, the third round of talks on Monday night between Russia and Ukraine saw what Kyiv termed “small positive shifts regarding logistics of humanitarian corridors” with consultations set to continue on trying to negotiate an end to the hostilities.
Some observers characterised the Russian announcement of a limited ceasefire on Tuesday morning and the opening of safe corridors as “significant”, although it might be skepticism following two earlier failed attempts.
UK baker and fast food chain Greggs fell 5.6% after the company warned that cost headwinds would crimp profits growth this year.
M&G shares surged more than 14% after the company announced a £500m share buyback and posted reduced annual operating profit resulting partly from changes to the expected death rate.
Shares in flexible workspace provider IWG rose 11% as it announced the merger of its digital assets with The Instant Group with a view to listing the business in the next two years.
