Europe’s stock markets closed sharply lower on Monday, but recouped some losses in afternoon trading on hopes of a deal to resolve Ukraine tensions.

The FTSE 100 ended 1.7% down, and the main markets in Paris and Frankfurt 2% lower, with travel stocks hard hit.

Reports from Russia that talks with the West over Ukraine should continue helped improve investor sentiment.

That limited losses on Wall Street, where at lunchtime in New York the Dow Jones was down 0.5% and Nasdaq up 0.7%.