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European shares rise on hopes for Ukraine and Volkswagen

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By Sruthi Shankar and Shreyashi Sanyal

March 14 (Reuters) – European stocks rose on Monday, clinging to hopes diplomatic efforts by Ukraine and Russia will end a weeks-long conflict, while shares in Volkswagen rose after the German carmaker doubled your operating profit.

* The pan-European STOXX 600 index closed 1.2% higher, extending Friday’s gains as Russian President Vladimir Putin said there was a positive turn in talks with Ukraine.

* Russia and Ukraine made their most optimistic statements after negotiations over the weekend, despite Russia attacking a base near the Polish border and fighting intensifying elsewhere.

* “The initial fighting in Ukraine caused a surge of risk aversion in the markets, but for now the situation seems to have calmed down, at least for the markets,” said Chris Beauchamp, chief markets analyst at online trading platform IG.

* “Western intervention still seems very unlikely, and for now the negotiations are working (…) For now it seems that the bullish mood will revive, but there are still many unknowns to solve.”

* Auto industry shares rose and 3.3% to lead the gain among sectors.

* Volkswagen AG stock rose 4.4% as higher prices and a more favorable product mix boosted operating profit.

* However, China-exposed miners, which have outperformed recently, fell and 2.6% as rising COVID-19 infections in the world’s top metals consumer stoked concerns about growth prospects economic.

(Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru. Edited in Spanish by Javier López de Lérida)

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