Russian president Vladimir Putin called on pro-Russia groups in eastern Ukraine to postpone a planned referendum on independence, fuelling hopes of an easing of the crisis that has threatened to tear the country apart.

Russia’s Micex index closed 3.4 per cent higher, a six-week high, while the rouble strengthened against the euro and dollar as Mr Putin said he would pull Russian troops away from Ukraine’s border.

In a shift from recent more hardline comments by senior Russian officials, Mr Putin also said Ukraine’s plans to hold presidential elections on May 25 were a “step in the right direction”. But he added that the Kiev government had first to hold talks with separatists in the east and suspend its “unacceptable” military operation against pro-Russian groups in Donetsk and Lugansk regions.