London close: Stocks sharply lower as Russia attacks Ukraine

London’s equity markets closed well below the line on Thursday, as the world watched Russia’s violent invasion of Ukraine.

The FTSE 100 ended the session down 3.88% at 7,207.01, and the FTSE 250 was 2.82% weaker at 20,254.44.

Sterling was in the red as well, last trading down 1.37% on the dollar at $1.3359, and slipping 0.05% against the euro to €1.1980.

Oil prices continued their upwards trajectory as well, with Brent crude last 6.35% higher at $102.99 per barrel, and West Texas Intermediate 4.16% firmer at $95.93.

“While it had been expected, the actual Russian move into Ukraine has provoked another bout of selling across markets,” said IG senior market analyst Chris Beauchamp.

“Apart from an impressive intraday recovery in the Nasdaq, most indices are firmly in the red, and are likely to stay that way.

“A full package of Western sanctions has yet to be announced, and we should see this risk-off atmosphere persist for the time being.”

Beauchamp said Russia’s goals were still unclear, but a total takeover of Ukraine could not be ruled out.

“What happens after that is much harder to define, but the standoff between Putin and NATO is certainly a long-term fixture.

“Faced with this shattering news, everything else pales into insignificance, but the expectation is that earnings will continue to suffer. Stocks have not yet found a floor it seems.”

Indeed, Russia launched strikes across Ukraine overnight with an apparent focus on the country's military infrastructure, as a precursor to land incursions that were now under way.

In response, European Commission president Ursula von der Leyen promised to "weaken Russia's economic base and its capacity to modernise" after what she said had been a "barbaric attack" against Ukraine.

Prime Minister Boris Johnson was announcing tougher sanctions against Russia on Thursday evening.

Russian armoured vehicles had now crossed into Ukraine from Russia, Belarus and the annexed Crimea.

Explosions were being heard in several Ukrainian cities, including the capital Kyiv, with footage showing long lines of cars jamming roads as residents attempted to flee.

On the economic front across the pond, first-time jobless claims in the US fell at a faster than expected clip in the week ended 19 February following three consecutive weeks of increases.

According to the Labor Department, 232,000 Americans filed initial jobless claims last week, down from the 248,000 reported a week earlier and slightly better than the expected print of 235,000.

Continuing claims came in at 1.47m, down from 1.59m in the prior week to a new pandemic-era low, while the four-week moving average decreased by 7,250 to 236,250.

Meanwhile, the advance seasonally adjusted insured unemployment rate was 1.1% for the week ended 12 February, unchanged from the previous week's revised rate.

In equity markets, Russian steelmaker Evraz - whose largest shareholder is Russian billionaire Roman Abramovich - plummeted 30.39%, and Anglo-Russian precious metals miner Polymetal International tanked 37.82%.

Travel stocks were under pressure amid worries about the impact of the Ukraine crisis, with BA and Iberia owner IAG descending 6.13%, low-cost carriers Wizz Air and easyJet off 12.46% and 7.61%, cruise line Carnival down 4.24%, and travel organiser TUI 4.39% lower.

Eastern Europe-focussed Wizz Air said earlier that it had halted flights to and from Ukraine.

Elsewhere, Rolls-Royce was down 13.02% after the engine maker said chief executive Warren East would leave at the end of 2022, and that it swung to an annual operating profit.

AJ Bell’s Russ Mould said investors were reacting badly to news of East’s departure.

"East has been at the helm of Rolls-Royce for a comparatively long time and while progress may have been slower than the market may have liked, the credentials he built up at former market star ARM meant he was given the benefit of the doubt in a slow rehabilitation of the business.

"Rolls-Royce was in a very tricky spot when he took over, with a string of damaging profit warnings in the early 2010s and a serious cash flow problem.

"It has been pretty turbulent under East too, though in part that reflects a global pandemic which had a disastrous impact on Rolls-Royce’s aviation sector clients.”

Lloyds Banking Group slid 10.83% amid concerns about the outlook, after the bank announced a £2bn share buyback as rising revenue supported higher annual profit.

On the upside, precious metals miners shone as prices for safe haven gold headed northwards, with Fresnillo up 4.01%, Hochschild rising 13.77%, and Centamin 3.59% firmer.

BAE Systems gained 5.16% after it reported a rise in full-year earnings and struck an upbeat note on its outlook, with its position as a defence company likely underpinning sentiment as well.

Anglo American advanced 1.77% after the miner posted a jump in full-year profit thanks to strong demand and prices.

Market Movers

FTSE 100 (UKX) 7,207.01 -3.88%
FTSE 250 (MCX) 20,254.44 -2.82%
techMARK (TASX) 4,219.94 -2.48%

FTSE 100 - Risers

BAE Systems (BA.) 631.80p 5.16%
Fresnillo (FRES) 715.80p 4.01%
Dechra Pharmaceuticals (DPH) 3,900.00p 1.77%
Anglo American (AAL) 3,597.50p 1.77%
Halma (HLMA) 2,255.00p 0.89%
Shell (SHEL) 1,952.80p 0.49%
Rentokil Initial (RTO) 485.60p 0.04%
Ocado Group (OCDO) 1,324.50p -0.11%
Spirax-Sarco Engineering (SPX) 11,360.00p -0.18%
Avast (AVST) 622.00p -0.19%

FTSE 100 - Fallers

Polymetal International (POLY) 682.40p -37.82%
Evraz (EVR) 171.25p -30.39%
Rolls-Royce Holdings (RR.) 102.38p -13.02%
WPP (WPP) 1,034.00p -12.11%
Mondi (MNDI) 1,684.00p -11.76%
Lloyds Banking Group (LLOY) 46.54p -10.83%
Standard Chartered (STAN) 514.80p -10.47%
St James's Place (STJ) 1,339.00p -9.44%
Abrdn (ABDN) 202.80p -8.94%
Hikma Pharmaceuticals (HIK) 1,833.50p -8.92%

FTSE 250 - Risers

Hochschild Mining (HOC) 115.70p 13.77%
Capricorn Energy (CNE) 217.20p 4.73%
Energean (ENOG) 1,005.00p 4.69%
Howden Joinery Group (HWDN) 761.60p 4.21%
Centamin (DI) (CEY) 99.90p 3.59%
Trustpilot Group (TRST) 142.00p 3.20%
Harbour Energy (HBR) 363.40p 3.00%
Baillie Gifford US Growth Trust (USA) 210.00p 2.69%
Future (FUTR) 2,486.00p 2.56%
Vivo Energy (VVO) 134.80p 2.28%

FTSE 250 - Fallers

Ferrexpo (FXPO) 142.30p -42.57%
Petropavlovsk (POG) 10.00p -27.01%
Inchcape (INCH) 720.50p -13.40%
Wizz Air Holdings (WIZZ) 3,190.00p -12.46%
TBC Bank Group (TBCG) 1,210.00p -10.64%
Provident Financial (PFG) 284.80p -8.37%
Dunelm Group (DNLM) 1,153.00p -8.05%
easyJet (EZJ) 597.20p -7.61%
Paragon Banking Group (PAG) 503.00p -7.11%
Watches of Switzerland Group (WOSG) 1,188.00p -6.90%