Russia announced the start of a pullback of some forces after drills that raised U.S. and European alarm about a possible military assault on Ukraine.

Markets rallied on news of the withdrawal as investors took the move as a sign of possible de-escalation by Russia amid a major diplomatic push following weeks of warnings from the U.S. and Europe about the risks of a conflict. The Kremlin has consistently denied it plans an attack and President Vladimir Putin endorsed continued talks with the West.

The U.S. and NATO have warned that Russia has massed some 130,000 troops near the border with Ukraine in preparation for a possible invasion and demanded a withdrawal to ease tensions. Russia has rejected the accusations while saying movements of forces on its own territory are an internal matter. Russia is continuing its largest drills in years in neighboring Belarus that are due to finish on Feb. 20 and is conducting naval exercises in the Black Sea that are scheduled to wrap up on Sunday.