Europe's main stock markets rebounded Tuesday from the previous day's slump as tensions eased after Russian President Vladimir Putin declared there was "no need" yet to send troops into Ukraine.
London's benchmark FTSE 100 index rallied 1.54 percent to stand at 6,811.45 points in midday deals, Frankfurt's DAX 30 jumped 2.28 percent to 9,571.58 points and in Paris the CAC 40 won 2.33 percent to 4,390.45.
The dollar and euro also clawed back some of Monday's losses against haven currency the yen as a degree of confidence returned to the market, while gold and oil prices fell from multi-month highs.
The US currency strengthened to 101.77 from 101.42 yen late in New York on Monday.
"Markets have rebounded... as President Putin appeared to have cooled tensions," said Toby Morris, a trader at CMC Markets.
However Putin did add in comments broadcast live on national television that: "We reserve the right to use all means to protect" Russian and Ukrainian citizens in Ukraine.
The Russian stock market rallied by about five percent on Tuesday after plunging by more than ten percent the previous day.
The ruble also rose slightly after hitting recent record low rates against the euro and dollar.
Fears of an assault by Russian forces on Ukrainian military bases surrounded in Crimea -- a mainly Russian-speaking peninsula in the southeast of the ex-Soviet state -- did not materialise overnight.
Ukrainian officials said Monday that Russia had given Ukrainian soldiers in Crimea an ultimatum to surrender or face an all-out assault, although Russia denied this.
"After a huge sell-off, markets look a little bit relaxed, but whether the rebound is a sustained one it remains to be seen," said Varengold Bank analyst Anita Paluch.
"While the tensions have never been higher, the ultimatum by Russia has passed without any major commotion."
World shares had mostly tumbled on Monday after Russia's parliament voted over the weekend to allow Putin to send troops into Crimea.
It came following last month's ousting of the pro-Russian government in Kiev of Viktor Yanukovych, after weeks of protests in the capital.
Pro-Moscow forces remain in de-facto control of Crimea -- a strategic Black Sea peninsula that has housed the Russian Black Sea Fleet since the 18th century, although Putin said Russian troops had not been involved in any of their actions.
Asian equities were mixed Tuesday after the previous day's global sell-off, but investors remain on edge as they await world leaders' response.
Moscow's move was met with world condemnation and warnings of possible political and economic isolation, with Washington and the European Union saying they were looking at a range of sanctions.
While the international community anxiously watches events in Eastern Europe, analysts said the fact that the crisis had not worsened had provided a buying opportunity.
In Asia, Tokyo stocks rose 0.47 percent, Sydney added 0.29 percent and Hong Kong won 0.70 percent in value, while Shanghai dipped 0.18 percent and Seoul gave up 0.54 percent.