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Ukraine bonds, shares soar

Ukrainian bonds rebounded from a record low and equities erased declines as European Union sanctions added to pressure on President Viktor Yanukovych to find an end to violence that has killed at least 64 people.

Bloomberg News reported that the yield on the government’s $1bn of notes due in June tumbled 12 per centage points from a record to 30 per cent in Kiev. The notes slumped the most on record yesterday as the deadliest clashes in the three-month standoff overshadowed Russia’s decision to resume a $15bn bailout plan put on hold last month.

EU foreign ministers agreed on the need “to look at targeted sanctions,” Catherine Ashton, the bloc’s foreign policy chief, said today in Brussels. The move comes after Kiev’s mayor quit Yanukovych’s party over the unrest and lawmakers in Lviv on the Polish border established an autonomous government and declared allegiance to the opposition.

“The full court press by the European governments and sanctions may be leading investors to suggest that the endgame may be approaching more rapidly than expected,” Richard Segal, a strategist at Jefferies International Limited in London, said by e-mail today. The moves today “can be a technical correction after such a sharp drop yesterday,” he said.

The yield on the 2014 debt soared 19 per centage points on Wednesday as the bloodiest clashes since the three-month standoff began prompted Poland to warn that its eastern neighbour may be on the brink of civil war.

A truce between Yanukovych and the opposition last night fell apart as violent skirmishes today in Independence Square, the hub of the demonstrations, took the death toll since February 18 to 64, according to Health Ministry figures. Aside from Lviv, protesters seized government and security headquarters in at least four other regions.

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