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London open: Stocks little changed as investors monitor Ukraine conflict
London stocks were little changed in early trade on Friday as investors continued to monitor any developments in the Russia-Ukraine conflict.
At 0830 GMT, the FTSE 100 was down 0.1% at 7,378.47.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Equity markets remain highly sensitive to the repercussions of the conflict and as fighting enters the fourth week, there still seems a gulf separating Russian and Ukrainian negotiators.
“Russian aggression is expected to be discussed on a difficult call between the US President and China’s premier later which is causing nervousness given it comes at a sensitive diplomatic time between Russia and the US. Reports that Joe Biden will tell Xi Jinping that Beijing will pay a price if it supports Russia, has done little to calm worries about the potential escalation of the geopolitical situation.
“With the corporate world having built up a solid fortress to isolate Russia from the global economy, the US clearly wants to ensure Russia can’t find an escape route to avoid the effectiveness of sanctions.”
In equity markets, pub chain JD Wetherspoon nudged lower despite saying it halved interim pre-tax losses as Covid restrictions eased and that trading in the last three weeks was now 2.6% below 2019 pre-pandemic levels.
Investec lost ground even as it lifted full-year profit guidance, driven by the post-pandemic economic recovery.
Vodafone rose following a Reuters report that global infrastructure funds have approached the company to invest in its $16bn mast company Vantage Towers.
Vital components manufacturer Essentra gained as it hailed a “strong” full-year trading performance, driven by accelerated growth in the final quarter of the year.
Power generation company ContourGlobal was also among the risers as it reported a record full-year financial performance and said trading in the current financial year was ahead of the board’s expectations.
Drinks maker C&C fizzed higher after an upgrade to ‘buy’ at Shore Capital, while Softcat was lifted by an upgrade to ‘buy’ at Berenberg.
Outside the FTSE 350, Ted Baker surged after US private equity firm Sycamore Partners confirmed it was in the early stages of considering a possible cash offer for the fashion retailer.
Top 10 FTSE 100 Risers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ocado Group Plc | +3.08% | +34.00 | 1,139.00 |
| 2 |  |
Kingfisher Plc | +1.47% | +4.20 | 289.30 |
| 3 |  |
Anglo American Plc | +1.38% | +50.50 | 3,704.50 |
| 4 |  |
Vodafone Group Plc | +1.37% | +1.72 | 127.68 |
| 5 |  |
Prudential Plc | +1.07% | +11.50 | 1,082.50 |
| 6 |  |
Glencore Plc | +1.02% | +4.85 | 479.95 |
| 7 |  |
Carnival Plc | +0.83% | +10.80 | 1,315.40 |
| 8 |  |
Fresnillo Plc | +0.77% | +5.60 | 736.40 |
| 9 |  |
Scottish Mortgage Investment Trust Plc | +0.65% | +6.40 | 991.40 |
| 10 |  |
Bhp Group Limited | +0.64% | +16.50 | 2,590.50 |
Top 10 FTSE 100 Fallers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Pearson Plc | -2.59% | -21.00 | 789.20 |
| 2 |  |
Coca-cola Hbc Ag | -2.20% | -38.00 | 1,685.50 |
| 3 |  |
Tui Ag | -1.74% | -4.20 | 236.60 |
| 4 |  |
Itv Plc | -1.68% | -1.44 | 84.40 |
| 5 |  |
Mondi Plc | -1.60% | -24.50 | 1,511.00 |
| 6 |  |
Micro Focus International Plc | -1.53% | -6.00 | 385.30 |
| 7 |  |
Flutter Entertainment Plc | -1.47% | -138.00 | 9,232.00 |
| 8 |  |
Phoenix Group Holdings Plc | -1.45% | -9.40 | 637.80 |
| 9 |  |
International Consolidated Airlines Group S.a. | -1.38% | -1.96 | 140.22 |
| 10 |  |
Rolls-royce Holdings Plc | -1.35% | -1.27 | 92.91 |
Europe open: Shares edge ahead as Russia expands shelling of Ukraine
European shares edged ahead at the opening on Friday as Russia started shelling cities in western Ukraine.
The pan-European Stoxx 600 index was up 0.07% on the back of a positive close on Wall Street and generally strong trade in Asia where only Hong Kong’s Hang Seng was lower.
The spread of Russia’s invasion of Ukraine and increasing sanctions on Moscow and its supporters helped drive a rise in oil prices as investors feared supply disruption. Brent crude traded at around $108 a barrel.
Traders were also eyeing a phone call between US President Joe Biden and China Premier Xi Jinping later Friday with media reports stating Washington would warn Xi that Beijing will pay a price if it supports Russia.
“With the corporate world having built up a solid fortress to isolate Russia from the global economy, the US clearly wants to ensure Russia can’t find an escape route to avoid the effectiveness of sanctions,” said Hargreaves Lansdown analyst Susannah Streeter.
In equity news, Vodafone rose after a report that global infrastructure funds have approached the telecom giant to invest in its $16bn mast company Vantage Towers.
US close: Stocks extend rally following Fed’s rate decision
Wall Street stocks closed higher on Thursday as investors digested the Federal Reserve’s interest rate decision, jobless claims data and news out of Russia and Ukraine.
At the close, the Dow Jones Industrial Average was up 1.23% at 34,480.76, while the S&P 500 was 1.23% firmer at 4,411.67 and the Nasdaq Composite saw out the session 1.33% stronger at 13,614.78.
The Dow closed 417.66 points higher on Thursday, extending gains recorded in the previous session after the Federal Reserve raised its benchmark lending rate target by 0.25% after its two-day policy meeting for the first rate hike in four years.
The Fed decision was still in focus on Thursday, given that it marked a significant shift away from two years of accommodative policy, due to inflation running at 40-year highs and many economies facing a cost-of-living crisis.
Looking ahead, the central bank said it now sees its main policy rate reaching 1.9% by the end of 2022, before increasing to 2.8% next year, with the bank’s number-crunching suggesting that was the level where interest would begin putting the kibosh on economic growth.
Also in focus during the session were comments from Kremlin spokesman Dmitry Peskov, who said a Financial Times report of “substantial progress” being made in talks between Kyiv and Moscow were “wrong”. Although negotiations were set to continue on Thursday, Peskov blamed Ukraine for dragging its feet, claiming that Kyiv was “in no rush” to reach an agreement.
“For all the talk about wanting to find a diplomatic path forward, we haven’t seen them act on that,” said Pentagon spokesman John Kirby. “What you’re seeing by the Russians on the ground is a full-on commitment to military operations.”
On Wednesday, Ukrainian president Volodymyr Zelensky told NBC News that talks with Moscow were ongoing but “fairly difficult”.
Elsewhere, Russia’s finance ministry has reportedly sent an order to Citibank‘s London branch to make $117.0m in interest payments on two dollar bonds that were due on Wednesday, as it looks to avoid its first default on foreign debt since 1918. It was not made clear as to whether the payment was made in dollars or roubles.
On the macro front, new claims for unemployment benefits fell by 15,000 to 214,000 in the week ended 12 March, according to the Labor Department, for the lowest figure in ten weeks.
That figure was down from the prior week’s revised 229,000 reading and ahead of market expectations for a print of 220,000. The four-week moving average, which aims to strip out week-to-week volatility, was 223,000, a decrease of 8,750 week-on-week, while continuing claims printed at 1.41m.
On another note, housing starts in the US surged 6.8% month-on-month to a seasonally adjusted annualised rate of 1.76m in February 2022, the highest since June 2006, and well above market forecasts of 1.69m, while building permits fell 1.9% on the month to a seasonally adjusted annual rate of 1.85bn in February, down from the previous month’s 16-year high of 1.89bn and in line with market expectations.
Still on data, the Philadelphia Fed manufacturing index rose to 27.4 in March from 16 in February, above market expectations of 15 for the highest reading since November 2021.
Finally, industrial production increased 7.5% year-on-year in February, the biggest annual gain since June 2021, with manufacturing jumping 7.4% and mining increasing 17.3%, while utilities output contracted 1.2%
In the corporate space, Dollar General shares were in the green before the open despite posting a wider than expected drop in same-store sales but issued an upbeat full-year outlook.
Friday newspaper round-up: Steelworkers, TM Lewin, AstraZeneca, Bulb
Thousands of steelworkers were the victims of pension regulation failures that left some with losses of up to £489,000, an official report has found, prompting accusations that the UK financial watchdog was “asleep at the wheel”. The National Audit Office’s findings relate to a 2017 scandal involving members of the British Steel pension scheme, many of whom were persuaded to transfer their retirement savings by advisers who then pocketed huge fees. – Guardian
The shirtmaker TM Lewin has called in administrators for the second time in less than two years, becoming the latest victim of the general shift to working from home. The business, which operated 150 shops before the pandemic, has operated a solely online business since first calling in administrators in June 2020. As well as its specialism, shirts, it sells suits, knitwear, coats and accessories such as ties. – Guardian
AstraZeneca is braced to abandon efforts to get its Covid vaccine approved in the US if it is simply “banging its head against a brick wall indefinitely” with regulators. Sir Mene Pangalos, AstraZeneca’s head of research and development, said the company did not need to “push [its Covid-19 vaccine] in places we are not needed or wanted”. – Telegraph
HSBC may be closing down dozens more of its branches in the real world, but in the virtual world the bank is embarking on an expansion drive. It has bought a plot of virtual real estate in The Sandbox, an online gaming space majority-owned by the Hong Kong-based Animoca Brands. The bank did not say how much it paid for the land, which it will use to engage with its customers and sports and gaming fans in the metaverse. – The Times
MPs have called on the government to explain why it has barred administrators to Bulb Energy from hedging its gas and electricity purchases, leaving taxpayers exposed to rising costs as prices soar. Britain’s seventh-biggest household energy supplier collapsed in November with 1.6 million customers and was placed into a government-backed special administration regime. The administrators, from Teneo, were provided with an initial £1.7 billion taxpayer loan. – The Times
