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PARIS, Aug 18 (Reuters) - European shares rallied in early trade on Monday, reversing the previous session's losses, helped by easing worries over geopolitical risks from Ukraine and Iraq.
Ukrainian forces have raised their national flag over a police station in the city of Luhansk that was for months under rebel control, Kiev said on Sunday, in what could be a breakthrough in Ukraine's efforts to crush pro-Moscow separatists.
Also reassuring investors, Russia's Foreign Ministry said on Monday a 'certain progress' was achieved during talks between Russia, Germany, France and Ukraine in Berlin on Sunday on ways to end the military conflict in eastern Ukraine.
At 0704 GMT, the FTSEurofirst 300 index of top European shares was up 1.1 percent at 1,337.66 points.
The pan-European index had lost 0.5 percent on Friday and Germany's DAX had dropped 1.4 percent after news that Ukrainian forces had destroyed a Russian military column in Ukrainian territory fuelled fears of an escalation in the conflict. (Reporting by Blaise Robinson, editing by Tricia Wright)