Europe shares rally as fear of Ukrainian escalation eases
* FTSEurofirst 300 up 1.1 pct, bounces from Friday's dip
* Rebound led by German blue-chips
By Blaise Robinson
PARIS, Aug 18 (Reuters) - European shares rallied on Monday morning as the threat of wider conflict in Ukraine seemed to diminish.
In what may be a breakthrough in Ukraine's campaign against pro-Moscow separatists, government forces raised their national flag over a police station in the city of Luhansk that was for months under rebel control.
Also reassuring investors, Russia's Foreign Ministry said on Monday a 'certain progress' was achieved during talks among Russia, Germany, France and Ukraine in Berlin on Sunday.
At 0745 GMT, the FTSEurofirst 300 index of top European shares was up 1.1 percent at 1,338.02 points. Germany's DAX was up 1.4 percent.
German blue-chips - considered the most vulnerable to the tensions between the West and Russia - were among the top gainers on Monday. BASF rose 2.2 percent and both Bayer and Siemens gained 1.9 percent.
The pan-European index had lost 0.5 percent and Germany's DAX had dropped 1.4 percent on Friday, when reports that Ukrainian forces had destroyed a Russian military column in Ukraine sparked fears the conflict was escalating. Continuación...