London close: Stocks firmer as bargain hunters swoop in

The FTSE 100 ended the session up 3.91% at 7,489.46, and the FTSE 250 was 3.23% firmer at 20,906.75.

Sterling was in a mixed state, however, last trading 0.22% stronger on the dollar at $1.3410, while it slipped 0.34% against the euro to change hands at €1.1909.

“Bargain hunters have jumped into the FTSE 100 today, prompting a surge in stock prices that rivals yesterday’s declines,” said IG chief market analyst Chris Beauchamp.

“European markets have made headway too, but the gains are much less impressive here, as investors continue to fret about the economic dislocation to the European economy from higher gas prices and sanctions.”

Beauchamp said that while the FTSE 100’s upward move of recent months had been revived by Friday’s bounce, the situation for European indices was “much tougher” - a marked reversal of the trends of the last few years.

“So far the situation in Ukraine appears to be proceeding in a similar fashion to yesterday, with a further ramp-up in the conflict yet to develop.

“Reports of potential peace feelers being put out by both sides seemed to offer hope, but Putin’s terms will likely be too much for Ukraine to stomach as yet.”

On the crisis in Ukraine, a top official said from the country that it was ready for talks with the Russian Federation, including over the ‘neutral NATO status’ being demanded by Moscow.

"If talks are possible, they should be held. If in Moscow they say they want to hold talks, including on neutral status, we are not afraid of this," Ukrainian presidential advisor, Mykhailo Podolyak said, according to Reuters.

"We can talk about that as well. Our readiness for dialogue is part of our persistent pursuit of peace."

Kremlin spokesman, Dmitry Peskov, said Moscow had "taken note" of the new statement and that it "looked like a positive development".

Peskov added that he could not comment on whether talks would take place between Russian president Vladimir Putin and his Ukraine's counterpart Volodymyr Zelenskyy.

Still, Peskov said that Moscow would analyse the offer and that its expectations for Ukraine remained unchanged.

On home shores, Russian investor VTB Capital had its London Stock Exchange membership suspended on Friday, as part of the UK’s sanctions on the country.

Reuters reported that the suspension meant the company, part of Russia’s second-largest bank VTB, would no longer be able to trade on London’s exchange.

Westminster announced a set of “comprehensive sanctions” on Russia late on Thursday, after Vladimir Putin ordered a large-scale invasion of Ukraine, resulting in civilian deaths.

Russian bank assets in the UK were being frozen, and Russian state-owned and “key strategic private companies” were barred from raising finance on UK financial markets.

Other targets of the UK’s sanctions included defence company Rostec, air and sea missile supplier Tactical Missile Corporation, tank manufacturer Uralvagonzavod, and a number of individuals the UK said were in Vladimir Putin’s ‘inner circle’.

In economic news, UK consumer confidence dropped to its lowest for more than a year as households faced a barrage of rising costs that will squeeze budgets.

The GfK consumer confidence index fell 7 points in February to -26 - the lowest reading since January 2021, which was one of the worst points of the Covid-19 crisis with the UK in lockdown.

All measures that make up the index fell in February with the biggest declines shown in consumers' expectations for the coming year.

With budgets already under pressure, households face soaring energy costs, higher shop prices, tax increases and rising interest rates.

“Fear about the impact of price rises from food to fuel and utilities, increased taxation and interest rate hikes has created a perfect storm of worries that has shaken consumer confidence,” said Joe Staton, GfK's client strategy director.

“There’s clear anxiety in these findings as many consumers worry about balancing the household books at the end of the month without going further into debt.

“Slowing consumer spend slows the wheels of the UK economy so this is unwelcome news.”

UK car production, meanwhile, slumped by a fifth in January as manufacturers were hit by parts shortages, a plant closure and alterations to new models.

The Society of Motor Manufacturers and Traders (SMMT) said 68,790 cars were made during the month, the industry’s worst start to a year since 2009.

Production for overseas and domestic markets was down by 17.5% and 30.8% respectively year on year, the SMMT added.

Battery electric vehicle production was up a third, with one in 11 cars rolling off factory lines zero emission. Including plug-in hybrids and hybrids, electrified vehicles accounted for more than 25% of output.

“It’s another torrid start to the year as global supply issues and structural changes squeeze output while model changes impact production scheduling,” said SMMT chief executive Mike Hawes.

Across the pond, US consumer confidence continued to languish near its weakest level in the past decade amid rising inflation.

The University of Michigan's consumer confidence index edged up from a preliminary reading of 61.7 to finish the month of February at 62.8.

That was below January's level of 67.2 but better than economists' forecasts for an unchanged reading.

In equity markets, Russian steelmaker Evraz surged 19.53%, having slid a day earlier amid worries about the impact of the Ukraine crisis.

The company's full-year results, released earlier, showed that net profit rose to $3.1bn from $858m.

Evraz also warned in the results that the "worsening situation related to Ukraine has further increased the economic uncertainty and the risk of the imposition of sanctions".

Anglo-Russian precious metals miner Polymetal International was also in the black, jumping 17% after heavy losses on Thursday.

Elsewhere, educational publisher Pearson gained 12.1% after saying it would launch a £350m share buyback, and that demand for assessment and qualification services had allowed it to hit its 2021 targets.

Rightmove rose 4.52% after the online property portal posted a jump in full-year profit and sounded an upbeat note on the outlook.

IAG popped back above the waterline after a turbulent session for the stock, with its shares closing up 4.83% in London.

The British Airways and Iberia owner said it was expecting to return to profit in the second quarter despite a "significant" operating loss in the first quarter due to the Omicron variant, seasonal slowdown and capacity rebuilding costs.

It also said during the day that it was halting all flights to and from Russian territory, as authorities in Moscow banned all aircraft “linked to the UK” in retaliation to the UK’s sanction banning its flag carrier Aeroflot.

The company, which also owns Aer Lingus and Vueling, narrowed 2021 losses to €2.7bn from €7.4bn and said it expected it would hit 85% of pre-pandemic 2019 capacity during the current year.

Still in travel, budget airline Wizz Air ascended 12.13%, having fallen sharply on Thursday amid worries about the impact of the Ukraine crisis and after saying it had halted flights to and from the country.

Travel organiser TUI was also clawing back some ground, rising 6.27% after losses on Thursday.

SSE rose 5.74% following a report that it had lined up banks to lead the sale of minority stakes in two electricity networks as it seeks funds for its green spending drive.

According to Bloomberg, which cited people familiar with the matter, the utility was working with Morgan Stanley and Rothschild & Co on the disposals.

The holdings in its transmission and distribution networks could be valued at more than £10bn.

Cybersecurity software giant Avast managed gains of 0.48%, after saying it delivered "another strong year of top line organic growth".

IMI eked out a rise of 0.6% after the engineer said full-year profits and revenue rose, as it hailed positive market conditions.

In the year to the end of December, pre-tax profit rose 12% to £307m, with revenues up 2% on the prior year at £1.9bn.

The company declared a dividend of 23.7p a share, up 5%.

On the downside, precious metals miners Hochschild and Centamin lost their shine, falling 4.84% and 5.45% respectively, having rallied a day earlier on surging gold prices.

Market Movers

FTSE 100 (UKX) 7,489.46 3.92%
FTSE 250 (MCX) 20,906.75 3.22%
techMARK (TASX) 4,342.83 2.91%

FTSE 100 - Risers

Evraz (EVR) 204.70p 19.53%
Polymetal International (POLY) 793.40p 17.00%
Pearson (PSON) 672.60p 12.10%
Standard Chartered (STAN) 560.20p 8.82%
Lloyds Banking Group (LLOY) 49.68p 6.74%
Smith (DS) (SMDS) 353.10p 6.66%
Hikma Pharmaceuticals (HIK) 1,947.00p 6.19%
Prudential (PRU) 1,184.00p 6.14%
Mondi (MNDI) 1,786.50p 6.09%
Melrose Industries (MRO) 149.30p 5.89%

FTSE 100 - Fallers

JD Sports Fashion (JD.) 150.00p -2.28%
Fresnillo (FRES) 711.00p -0.67%
Avast (AVST) 625.00p 0.48%
Meggitt (MGGT) 748.60p 0.48%
B&M European Value Retail S.A. (DI) (BME) 581.80p 0.55%
Next (NXT) 6,796.00p 0.65%
Ocado Group (OCDO) 1,334.00p 0.72%
Berkeley Group Holdings (The) (BKG) 3,787.00p 0.80%
London Stock Exchange Group (LSEG) 6,476.00p 1.47%
Bunzl (BNZL) 2,760.00p 1.66%

FTSE 250 - Risers

Darktrace (DARK) 407.20p 14.06%
Wizz Air Holdings (WIZZ) 3,577.00p 12.13%
Cineworld Group (CINE) 41.19p 7.55%
Ferrexpo (FXPO) 153.00p 7.52%
BB Healthcare Trust (Red) (BBH) 166.00p 7.51%
Hammerson (HMSO) 36.48p 7.36%
Mitie Group (MTO) 54.10p 7.34%
Man Group (EMG) 191.95p 7.32%
Centrica (CNA) 77.38p 7.23%
TR Property Inv Trust (TRY) 460.00p 7.10%

FTSE 250 - Fallers

Centamin (DI) (CEY) 94.46p -5.45%
Petropavlovsk (POG) 9.49p -5.10%
Hochschild Mining (HOC) 109.80p -5.10%
Homeserve (HSV) 670.50p -3.38%
FDM Group (Holdings) (FDM) 851.00p -1.41%
Plus500 Ltd (DI) (PLUS) 1,417.50p -1.23%
Energean (ENOG) 994.00p -1.09%
Helios Towers (HTWS) 139.40p -0.85%
Wood Group (John) (WG.) 183.00p -0.81%
888 Holdings (888) 235.00p -0.76%