European stocks inch higher; investors focus on Russia-Ukraine tensions

European stocks inch higher; investors focus on Russia-Ukraine tensions

European stocks made cautious gains on Wednesday on hopes of a de-escalation of tensions between Russia and Ukraine, although accelerating inflation kept a lid on Britain's blue-chip index.

The continent-wide STOXX 600 index rose 0.3%, adding to the 1.4% jump on Tuesday when Moscow indicated it was returning some troops surrounding Ukraine in an apparent de-escalation.

However, concerns lingered as Kyiv appeared to blame Russia for a cyber attack and Britain joined the United States in saying it had yet to be convinced the pullout was real.

Riskier assets have been hammered in the past weeks, with volatility gauges jumping to January highs on fears that Russia will invade Ukraine, while surging oil prices added to inflation fears.

"A lot of it (risks) seems to be in the price, but we would not make an investment decision based on a geopolitical event," said Frederique Carrier, head of investment strategy at RBC Wealth Management. "Historically acts of war tend to have relatively short-lived impact on markets except if it is an oil crisis which itself triggers a recession."

UK's FTSE 100 lagged other main European indexes after data showed consumer prices rose at the fastest annual pace in nearly 30 years last month, boosting bets that