- Ukraine concerns ease after Putin speaks
- UK construction PMI falls
- ECB policy meeting nears
FTSE 100: 1.68%
CAC 40: 2.45%
FTSE MIB: 3.62%
IBEX 35: 2.44%
Stoxx 600: 2.05%
European markets breathed a sigh of relief today after Russian President Vladimir Putin said there was no need to send troops into Ukraine.
In his first public announcement since former Ukraine President Victor Yanukovich was ousted, Putin said military action would be a last resort.
However, he warned that Moscow is prepared to protect its citizens in Ukraine.
His comments lifted global stocks after a panic sell-off on Monday when it was reported that Russian forces had invaded Ukraine.
Diplomatic efforts are taking place to resolve the escalating crisis.
US Secretary of State John Kerry has arrived in the Ukrainian capital, Kiev, offering a $1bn package to help ease its looming financial crisis.
"The economies of Central and Eastern European are the most exposed to spillovers from the crisis in Ukraine, but as things stand the economic impact is likely to be limited," Capital Economics said.
"Admittedly, the crisis has the potential to escalate - the key risk for the region is that Russia could restrict its gas exports. However, so long as this doesn't happen, the prospects for the economic recovery will hinge much more on developments to the region's west, not to its east."
Eurozone producer prices drop by 0.3% in January
The Eurozone's producer price index fell by 0.3% over the month (-1.4% year-on-year) during January, according to Eurostat. The consensus estimate had been for a reading of -0.1% (-1.3% year-on-year).
"A marked dip in producer prices in January will do little to ease concerns over persistently very low Eurozone inflation and maintains pressure for ECB action at its March 6th policy meeting," wrote Dr Howard Archer, Chief European and UK Economist at IHS Global Insight.
Elsewhere in Europe it was a relatively quiet day, thin on economic data releases, although Markit released its purchasing managers´ index (PMI) for the UK´s construction sector in February this morning. The PMI slipped to a reading of 62.6 in February, from the 77-month high of 64.6 in January.
ECB meeting looms
Investors are beginning to look ahead to the European Central Bank (ECB) meeting on Thursday amid speculation over the next policy move.
Low inflation and high unemployment have piled pressure on the ECB to enact greater measures but analysts are mixed on their forecasts.
"A marked dip in producer prices in January will do little to ease concerns over persistently very low Eurozone inflation and maintains pressure for ECB action at its March 6th policy meeting," according to Howard Archer, Chief European and UK economist at IHS Global Insight.
However, analysts at Bank of America Merrill Lynch believe that the ECB is likely to hold fire until later meetings: "In our view, the ECB is not ready to fire a 'bazooka' in this week's meeting, despite very low inflation and rising deflation risks.
"[...] Looking ahead, we believe that the ECB is not worried about deflationary risks yet. However, the ECB might be pushed into action at the April meeting, or this summer, if inflation falls further," they said.
Glencore advanced after increasing its 2014 forecast for cost savings following the miner's merger with Xstrata last year.
Germany's Beiersdorf, the maker of Nivea skin care products, jumped after reporting a near-10% rise in 2013 profit.
Ashtead Group gained after saying full-year profit will exceed the company's previous projections.
Bank of Ireland fell on reports billionaire investor Wilbur Ross and Fairfax Financial Holdings have started to sell a 6.4% stake in the lender at 32.5 cents to 33.3 cents per share.
Fresnillo declined after the miner reported a drop in annual profit due to weaker precious metal prices and lower gold production.
GAM Holding was higher as the Swiss money manager lifted its dividend after annual profit rose.
The euro rose 0.02% to $1.3738.
Brent crude futures fell $1.683 to $109.360 per barrel, according to the ICE.