Peace talks in Ukraine were giving the industrial metals and mining sector in London a big boost on Wednesday.
Steel group Evraz and iron ore producer Ferrexpo, which both have assets eastern Europe, were among the best performers in the sector, up over 5% and 3% in afternoon trade, respectively.
Conflicting messages from Russian President Vladimir Putin and Ukrainian counterpart Petro Poroshenko initially provided some uncertainty to the markets, but the underlying message was that both sides were working together in an effort to de-escalate the conflict.
"The parties reached mutual understanding on the steps that will facilitate the establishment of peace," Poroshenko's office said. An earlier statement had said that the parties had agreed on a "permanent ceasefire", though these claims were denied by Moscow.
Analyst Craig Erlam from Alpari UK said that the reports were welcomed "with open arms" by the markets, "following months of growing tensions between Russia and the West that has resulted in painful economic sanctions being applied by both sides".
In its half-yearly report last week, Evraz said that while its operations have not been affected by the unrest in Ukraine or sanctions on Russia, the company is "not immune to geopolitical risks". Evraz generates around 6% of group revenues from its Ukrainian business.
Ferrexpo reiterated its full-year production guidance last month alongside its own interim results and said that its operations had not been directly affected by the fighting. However, it said that while current operating costs have been reduced by the significant devaluation of the Ukrainian hryvnia, this "could be offset in the future by inflation".
Other stocks in the industrial metals and mining sector were also making gains, such as International Ferro Metals, London Mining, Berkeley Mineral Resources and First Quantum Minerals.
Top performing sectors so far today
Industrial Metals & Mining 1,314.28 +3.82%
Forestry & Paper 11,169.90 +1.87%
Banks 4,595.56 +1.60%
Construction & Materials 3,986.62 +1.55%
Personal Goods 23,689.89 +1.31%
Bottom performing sectors so far today
Insurance (non-life) 1,898.10 -0.67%
Industrial Transportation 2,802.73 -0.26%
Aerospace and Defence 4,951.98 -0.17%
Mining 17,413.91 -0.17%
Food & Drug Retailers 3,152.23 -0.14%