* FTSEurofirst 300 up 1.2 pct
* Euro STOXX 50 rises 1.3 pct
* Banks and Glencore among top performers
* Prospect of de-escalation in Ukraine dispute lifts stocks
* Equity markets bounce back from sharp fall on Monday
By Sudip Kar-Gupta
LONDON, March 4 (Reuters) - European shares rebounded on Tuesday from sharp losses in the previous session, with banks and miner Glencore among the top performers, on tentative signs of a de-escalation in belligerence between Ukraine and Russia.
The pan-European FTSEurofirst 300 index, which fell 2.2 percent on Monday, bounced back to stand 1.2 percent higher on the day at 1,334.54 points in early session trading.
The euro zone’s blue-chip Euro STOXX 50 index, whose 3 percent fall on Monday marked its worst decline since June 20 last year, also rebounded by 1.3 percent to 3,094.70 points.
Global equities fell sharply on Monday from multi-year highs following a move by Russian troops to seize control of Ukraine’s Crimea region.
However, stock markets recovered on Tuesday after Russian President Vladimir Putin ordered troops involved in a military exercise in western Russia back to base in an announcement that appeared intended to ease East-West tension over fears of war in Ukraine.
“I would look to buy the market on the dip but I wouldn’t bet on too much upside in the near-term,” said Hendrik Klein, who heads Swiss high-frequency trading and asset management firm Da Vinci AG.
Eric Bendahan, who manages European equity strategies at Swiss bank SYZ, expected an eventual resolution to the dispute between Ukraine and Russia.
“The market drop yesterday looked exaggerated,” he said.
Glencore Xstrata rose 2.4 percent to give one of the biggest lifts to the FTSEurofirst 300 index after it posted core profits above market forecasts.
Banks also recovered from a sharp fall on Monday, caused by worries over the exposure of some lenders to Ukraine and Russia, with the STOXX Europe 600 Banking Index rising by 1.4 percent.
The banking sector and European equities in general were further buoyed by speculation that the European Central Bank may loosen lending conditions on Thursday, after ECB President Mario Draghi said late on Monday that inflation in the euro zone was “way below” the ECB’s goal.
John Surplice, European equities fund manager at Invesco, backed banks as one of his favoured sectors for this year.
“It is important to remember that the bank sector has earnings that are more sensitive to economic growth than any other sector. So, as the economy improves, you are going to get this reflected in upside to earnings estimates for the banking sector,” said Surplice.