European stocks close higher as Ukraine-Russia talks raise hopes; Stoxx 600 up 1.7%

LONDON — European stocks closed higher on Tuesday as another round of Ukraine-Russia talks got underway

The pan-European Stoxx 600 closed up by 1.7%, with autos soaring 5.9% to lead the gains as all sectors traded in positive territory except basic resources and oil and gas, which fell 2.2% and 1.9% respectively

In terms of individual share price movement, French auto parts maker Faurecia added 17% to lead the Stoxx 600 amid a rally in auto stocks. On the opposite end of the benchmark, German chemicals firm K+S fell over 10%

The gains in Europe came as investors in the region remained focused on developments in Russia’s invasion of Ukraine. Face-to-face talks between the two sides resumed in Turkey on Tuesday

Markets extended gains Tuesday afternoon as Turkish Foreign Minister Mevlut Cavusoglu said the discussions had yielded the most significant progress to date

Russia’s deputy defense minister said following the talks that Russia had decided to drastically cut its military activity focused on Kyiv and Chernihiv, according to Reuters, while Ukrainian negotiators proposed adopting neutral status in exchange for security guarantees

Ukrainian officials said they would not be opening any humanitarian corridors Monday to allow the evacuation of civilians in light of intelligence that suggested Russian forces may be planning an attack on the evacuation routes

With bond markets particularly febrile at present and stocks around the world grinding higher despite the ongoing uncertainty around Ukraine and inflation, the TINA (there is no alternative) approach to equities might be in play, suggested James Athey, senior investment manager at Abrdn

“The psychological factor can’t be underestimated. Equity investors have for at least a decade if not longer been rewarded for buying every dip, and that Pavlovian response is difficult to fight back against,” Athey told CNBC’s “Street Signs Europe” on Tuesday

“It will slow and it will stop happening when investors lose money in that strategy and again, so far, they haven’t really done that

Elsewhere, U.S. stocks rose on Monday as investors looked to build on two straight weeks of gains. Traders are keeping tabs on a slew of key economic reports, while also monitoring the Federal Reserve’s planned interest rate hikes

The Job Openings and Labor Turnover Survey on Tuesday showed 11.3 million job openings, higher than the 11.1 million expected. The ADP will also release its private payrolls data ahead of the closely watched monthly jobs report, on Friday

CNBC’s coverage of the Atlantic Council Global Energy Forum continues on Tuesday and CNBC will be hosting panels with key business leaders including Regina Mayor, KPMG global sector head of energy, Larry Fink, CEO of BlackRock and Leo Simonovich, vice president and global head of Industrial Cyber & Digital Security at Siemens Energy