Ukraine war fears shake stocks and send oil soaring

Ukraine war fears shake stocks and send oil soaring

LONDON- Global markets clawed back losses on Tuesday as investors clung to hopes that Moscow's deployment of troops to two breakaway regions in eastern Ukraine will be as far Russia goes.

The spectre of war on Europe's eastern flank had flared on Monday, sending oil prices to a seven-year high, after Russian President Vladimir Putin ordered troops into the Donetsk and Luhansk regions of Ukraine.

The United States and its European allies started to announce harsh new sanctions in response, with German Chancellor Olaf Scholz warning that the Nord Stream 2 gas pipeline would now be denied certification to begin operating.

Europe's STOXX 600 index fell nearly 2% to a seven-month low in early trade but the mood gradually turned more positive and moved towards Monday's closing level after reports that Russia would recognise the current boundaries of the breakaway regions.

The rouble, which has been hammered by the rising tensions in recent weeks, swept higher in FX markets while German equities- seen as more vulnerable because of the country's heavy reliance on Russian gas - also erased losses of more than 2% to trade flat.

"We are not in the clear, but that gives a path to de-escalation," said Trium Capital fund manager Peter