TUESDAY MARKET CLOSE: Shares rebound as tension eases

London’s blue chip share index recouped yesterday’s hefty losses as world markets staged a bounce back amid signs that tensions are easing between Russia and Ukraine.

The FTSE 100 Index closed 115.42 points higher at 6823.77 - a gain of 1.7 per cent - more than wiping out the 1.5 per cent loss seen amid the turmoil in the wake of Russia’s military intervention.

Traders drew encouragement from Russian President Vladimir Putin’s decision to order troops involved in military exercises in western Russia back to their bases and his suggestion that the use of force was a choice of “last resort”.

IG market analyst Chris Beauchamp said: “Putin seemed to hint that he was determined to avoid a military confrontation, and his calming words did much to reassure jittery markets.”

In currency markets, there was little reaction to closely-watched survey data showing a slight slowdown in construction growth last month as the wet weather impacted housebuilding.

Commodities such as gold and wheat, which were sharply higher yesterday, gave back some of their gains.

It meant Mexican gold and silver miner Fresnillo dropped 45.5p to 924.5p and Randgold Resources fell by 72p to 4,881p.

In corporate results, Serco - which last week named Aggreko boss Rupert Soames as its new chief executive - improved 4 per cent or 17.4p to 467.2p after investors in the FTSE 250 company were spared further downgrades to forecasts.

Tool hire group Ashtead led the charge on the top tier after it upped full-year profit guidance and as third quarter figures beat expectations, sending shares 13 per cent higher - up 110p to 956p.