London open: Stocks up in choppy trade as Russia threatens Europe's gas supplies

London stocks were higher in choppy trade on Tuesday, shaking off opening losses even as surging oil and gas prices stoked inflation fears.

At 0900 GMT, the FTSE 100 was up 0.2% at 6,970.35, with oil and gas prices sharply higher after Russia threatened to halt gas supplies to the West through the Nord Stream 1 pipeline.

Investors were also mulling a report suggesting that the EU is considering a joint bond sale to fund energy and defence.

Neil Wilson, chief market analyst at Markets.com, described the moves in commodity markets as "crazy".

"It’s not just oil and gas markets going parabolic; yesterday saw multiple sigma moves in nickel prices as it jumped over 70% in a single day," he said.

"Prices are higher again today at $81k from about $25k a week ago. The LME has suspended trading for at least the remainder of the day. Wheat is higher again, too. European natural gas prices are mooning. This commodity squeeze will lead to margin calls and liquidations, we just don’t know many are hedged the wrong way.

"But what if talks yield results and Putin calls his troops back to end sanctions? A tail risk, for sure, but what if? There would be some considerable volatility as markets repriced. So far, the talks are not getting very far; the shelling continues. As long as Russia keeps up the attack it’s stagflationary."

In equity markets, Russian steelmaker Evraz, Anglo-Russian precious metals miner Polymetal and gold miner Petropavlovsk - which has operations in Russia - were all sharply higher as investors stepped in to pick up a bargain after recent heavy losses.

M&G rallied after it announced a £500m share buyback as the investment manager posted reduced annual operating profit resulting partly from changes to the expected death rate.

Fresnillo shone as the precious metals miner reported a jump in full-year profit and revenues, thanks in part to higher silver prices.

Equipment rental firm Ashtead gained as it posted a rise in third-quarter profit and revenue and said full-year results were set to be "slightly ahead" of its previous expectations.

Flexible workspace provider IWG surged after announcing, alongside its full-year results, the merger of its digital assets with The Instant Group with a view to listing the business in the next two years.

Elsewhere, medical products company ConvaTec and Direct Line both advanced after well-received annual results, while broadcaster ITV was boosted by an upgrade to ‘outperform’ at Bernstein.

On the downside, high street bakery Greggs tumbled after saying it swung to a full-year profit beyond pre-pandemic levels as its stores reopened from lockdowns, but warned of significant cost headwinds in 2022 from inflation and higher commodity prices.

Domino’s Pizza lost ground even as it unveiled a £46m share buyback and posted higher annual profit driven by a surge in post-lockdown sales.

Travis Perkins was also under the cosh after a downgrade to ‘hold’ at Jefferies.

Market Movers

FTSE 100 (UKX) 6,970.35 0.16%
FTSE 250 (MCX) 19,361.49 1.00%
techMARK (TASX) 4,066.20 0.02%

FTSE 100 - Risers

Evraz (EVR) 101.20p 31.43%
Polymetal International (POLY) 196.05p 13.62%
M&G (MNG) 198.80p 11.50%
ITV (ITV) 77.34p 5.31%
Royal Mail (RMG) 353.00p 3.98%
Fresnillo (FRES) 765.60p 3.54%
International Consolidated Airlines Group SA (CDI) (IAG) 120.32p 3.51%
Ashtead Group (AHT) 4,801.00p 3.38%
Rolls-Royce Holdings (RR.) 90.79p 2.92%
NATWEST GROUP PLC ORD 100P (NWG) 198.15p 2.75%

FTSE 100 - Fallers

Ocado Group (OCDO) 1,126.50p -4.57%
B&M European Value Retail S.A. (DI) (BME) 555.40p -2.70%
Hargreaves Lansdown (HL.) 971.20p -2.69%
Intertek Group (ITRK) 4,831.00p -2.62%
London Stock Exchange Group (LSEG) 7,208.00p -2.22%
Rightmove (RMV) 637.80p -2.18%
Informa (INF) 508.00p -2.08%
Pearson (PSON) 604.60p -2.07%
Relx plc (REL) 2,170.00p -1.94%
Vodafone Group (VOD) 118.68p -1.85%

FTSE 250 - Risers

Petropavlovsk (POG) 3.15p 26.00%
IWG (IWG) 261.80p 12.65%
Hochschild Mining (HOC) 132.10p 6.88%
TUI AG Reg Shs (DI) (TUI) 192.40p 6.09%
Oxford Biomedica (OXB) 638.00p 5.98%
Essentra (ESNT) 271.00p 5.24%
Genuit Group (GEN) 475.00p 5.09%
Playtech (PTEC) 590.50p 4.79%
Chrysalis Investments Limited NPV (CHRY) 161.50p 4.53%
Weir Group (WEIR) 1,588.00p 4.13%

FTSE 250 - Fallers

Greggs (GRG) 2,110.00p -7.58%
Clarkson (CKN) 3,230.00p -3.58%
Domino's Pizza Group (DOM) 338.00p -3.15%
Fidelity China Special Situations (FCSS) 247.00p -3.14%
Impax Environmental Markets (IEM) 406.50p -2.05%
JPMorgan American Inv Trust (JAM) 679.00p -2.02%
QinetiQ Group (QQ.) 306.00p -1.80%
JTC (JTC) 721.00p -1.64%
Scottish American Inv Company (SAIN) 449.00p -1.54%
Law Debenture Corp. (LWDB) 732.00p -1.35%