London open: Stocks gain as housebuilders rally; oil prices surge

London stocks rose in early trade on Wednesday despite ongoing concerns about the Ukraine crisis, with housebuilders on the front foot after solid results from Persimmon.

At 0900 GMT, the FTSE 100 was up 0.7% at 7,377.86, while oil prices surged above $110 a barrel as the war in Ukraine threatens supply and ahead of an Opec meeting later in the day.

Neil Wilson, chief market analyst at Markets.com, said: "Russia is starting a new phase of the campaign, bringing a lot more force to bear and shelling civilian areas. This poses the risk that the West will encounter growing pressure to sanction Russian oil and gas exports, with all that would entail.

"Centrica said it is urgently seeking to end its natural gas supply agreement with Gazprom - self-sanctioning already well underway. Exxon Mobil followed Shell and BP to say it will exit Russia, leaving $4bn in assets in doubt. We are seeing this with the container ships too, and banks. Moreover oil traders are already starting to try to secure alternatives.

"We should note that rising oil prices are a windfall for the Kremlin and Russia’s terms of trade - the ratio of its export to import prices - is at its highest since oil prices fell in 2014. This is one of the reasons why Western governments might play this card - the cognitive dissonance of squeezing Russia on all fronts with sanctions while still funding their war machine by buying oil and gas may not survive for long. The other reason will be mounting pressure from their electorates as bombing on civilians increases, leading to more deaths and distressing scenes for the TV screens."

In equity markets, Russian steelmaker Evraz and Anglo-Russian precious metals miner Polymetal were both trading up following heavy losses on Tuesday. Polymetal was also in focus after the release of its full-year results.

Oil giants Shell and BP gushed higher amid surging oil prices, while Hiscox advanced after the insurer said it swung to a full-year profit, with gross written premiums boosted by continued positive rate momentum in all three divisions and strong customer growth in the retail segment.

Persimmon was a high riser after the housebuilder said it remained confident for the current year despite rising interest rates, as strong demand boosted annual sales. Peers followed suit, with Taylor Wimpey and Barratt also up.

Aviva gained even as the insurer reported a 28% fall in annual profits, reflecting lower operating earnings from discontinued operations and also announced the £385m acquisition of Succession Wealth.

Gold miner Petropavlosk, which has operations in Russia, was the strongest performer on the FTSE 250 after sharp falls on Tuesday, while Weir Group rallied on well-received results.

On the downside, Coco-Cola HBC slid, with traders pointing to its significant exposure to Russia.

Airlines were under the cosh after the US banned Russian flights from its airspace, with BA and Iberia owner IAG and budget airlines Wizz Air and easyJet all sharply lower.

Elsewhere, Royal Mail was hit by a downgrade to ‘sell’ from ‘hold’ at Liberum, which pointed to a margin squeeze risk from pay inflation. The broker also cut its price target on the shares to 355p from 470p.

Market Movers

FTSE 100 (UKX) 7,377.86 0.65%
FTSE 250 (MCX) 20,602.02 0.49%
techMARK (TASX) 4,361.40 -0.29%

FTSE 100 - Risers

Evraz (EVR) 124.90p 21.44%
Persimmon (PSN) 2,440.00p 5.08%
Polymetal International (POLY) 269.80p 4.21%
Shell (SHEL) 2,031.00p 4.10%
Rio Tinto (RIO) 6,155.00p 3.99%
Taylor Wimpey (TW.) 145.90p 3.29%
Antofagasta (ANTO) 1,620.00p 3.09%
BP (BP.) 367.85p 3.01%
Barratt Developments (BDEV) 581.80p 2.94%
Ashtead Group (AHT) 4,965.00p 2.73%

FTSE 100 - Fallers

Coca-Cola HBC AG (CDI) (CCH) 1,633.00p -7.87%
Royal Mail (RMG) 374.40p -3.46%
Associated British Foods (ABF) 1,751.00p -2.64%
BT Group (BT.A) 178.75p -2.62%
Diageo (DGE) 3,577.50p -2.21%
Smurfit Kappa Group (CDI) (SKG) 3,436.00p -1.77%
Reckitt Benckiser Group (RKT) 6,213.00p -1.55%
Rolls-Royce Holdings (RR.) 90.68p -1.43%
Unilever (ULVR) 3,633.50p -1.40%
International Consolidated Airlines Group SA (CDI) (IAG) 134.48p -1.18%

FTSE 250 - Risers

Petropavlovsk (POG) 5.49p 10.46%
Weir Group (WEIR) 1,613.50p 6.12%
Hochschild Mining (HOC) 123.90p 5.63%
Darktrace (DARK) 481.60p 4.92%
Travis Perkins (TPK) 1,457.50p 4.67%
Reach (RCH) 176.40p 4.38%
Man Group (EMG) 201.10p 4.33%
Countryside Partnerships (CSP) 301.80p 4.07%
Ascential (ASCL) 326.80p 4.01%
Hiscox Limited (DI) (HSX) 931.00p 3.93%

FTSE 250 - Fallers

Wizz Air Holdings (WIZZ) 2,860.00p -5.08%
Network International Holdings (NETW) 209.60p -3.94%
Micro Focus International (MCRO) 361.10p -2.83%
TUI AG Reg Shs (DI) (TUI) 213.10p -2.74%
TBC Bank Group (TBCG) 1,146.00p -2.72%
C&C Group (CDI) (CCR) 199.50p -2.68%
Mitie Group (MTO) 53.50p -2.37%
Cineworld Group (CINE) 36.19p -2.19%
Lancashire Holdings Limited (LRE) 437.40p -2.15%
easyJet (EZJ) 534.60p -2.12%