London close: Stocks weaker amid Ukraine concerns, oil price rise
London stocks closed in negative territory on Thursday, as concerns over relations between Russia and Ukraine grew again.
The FTSE 100 ended the session down 0.87% at 7,537.37, and the FTSE 250 was off 1.24% at 21,557.59.
Sterling, meanwhile, was trading stronger, last rising 0.28% on the dollar to $1.3624, and gaining 0.39% against the euro to €1.1991.
“There’s a storm blowing in and markets have been battening down the hatches,” said AJ Bell financial analyst Danni Hewson.
“In the UK it’s a literal storm with Eunice expected to cause major disruption, but it’s the one brewing in Ukraine that’s unnerving investors across Europe and over on Wall Street too.”
Hewson quipped that markets don’t like uncertainty, as evidenced by the falling oil price - partly because of ongoing talks between the US and Iran, and partly because conflicting reports of a Russian pullback had kept investors glued to their screens.
“As long as the power stays on for market watchers, volatility is unlikely to vanish anytime soon.”
Geopolitical concerns intensified after Ukrainian officials accused Russia-backed rebels of shelling a village in the east Ukrainian disputed Donbas region, hitting a nursery school.
Also denting sentiment were comments from an unnamed US official overnight, who said that no Russian troops were withdrawn from the border with Ukraine, disputing Moscow’s claim that it was pulling back some forces.
The official said that as many as 7,000 troops have joined the 150,000 already near the border in recent days.
On the economic front, the number of Americans filing first-time unemployment claims registered their sharpest increase in four weeks, well ahead of market expectations for a print of 219,000.
Initial jobless claims increased by 23,000 to 248,000 in the week ended 12 February, according to the Labor Department, while the four-week moving average decreased by 10,500 to 243,250 and continuing claims printed at 1.59m.
While the increase was the first since mid-January, the level still remained markedly lower than the three-month high of 290,000 a month ago as Covid-19 Omicron infections slowed down following a surge across the US.
“Despite the uptick, we expect initial claims to continue to grind back toward 200,000,” said analysts at Oxford Economics.
“Layoffs are expected to be minimal in a tight labour market where employers continue to face difficulty hiring workers.”
Oxford noted that for the last six weeks, continued claims had remained below the pre-pandemic average of 1.71 million.
“We expect continued claims to stay at these levels or decline further as health conditions improve and more workers return to the labour market.”
In equity markets, Russian steelmaker Evraz lost 7.48% amid escalating Russia-Ukraine tensions, and after it emerged Russian oligarch Roman Abramovich had taken direct ownership of a near-29% stake in the company.
BP lost 1.45% and Shell gushed 2.67% lower as oil prices fell, while Imperial Brands slid 2.88% and Beazley declined 4.13% as they both traded without entitlement to the dividend.
Mondi finished 0.26% weaker after the paper and packaging group agreed to offload its personal care components business to Nitto Denko for €615m.
On the upside, consumer goods giant Reckitt Benckiser jumped 5.94% even after reporting an £804m annual operating loss, caused by the sale of its Chinese infant formula business.
Excluding the sale of the IFCN unit, operating profit fell 8.5%, or 2.6% at constant currency, to £2.94bn.
Like-for-like net revenue rose 3.3% - better than its guidance - and Reckitt said it was targeting growth of 1% to 4% on that basis in 2022.
Standard Chartered reversed earlier losses to tise 1.71% even after its annual results missed estimates.
The bank also unveiled a $750m share buyback, lifted profit targets and pledged higher investment in China.
It said pre-tax profit doubled to $3.3bn in 2021, although it missed the $3.8bn forecast by its own compiled average of 16 analysts.
Elsewhere, Burberry Group gained 1.32% following solid results from French luxury goods company Kering, while Bytes Technology was boosted 1.17% by an initiation at ‘buy’ at Barclays.
"We think Bytes ticks all the boxes for quality-focused investors, but recognise that alone may not be enough with a 27x FY23E price-to-earnings against the current backdrop," Barclays said.
"We note, however, that it is also defensive in two relevant ways - against wage inflation [and] talent wars, and against economic uncertainty.”
Indivior was ahead 3.31%, adding to Wednesday’s gains which came after it said it was considering a US listing, swung to an annual profit and predicted strong growth for its Sublocade opioid.
Online comparison site Moneysupermarket was up 2.83%, even after it reported a decline in full-year profit and revenue following a strong performance from its money division but weakness in home services and insurance.
Passenger transport operator FirstGroup was boosted 2.91% by an upgrade to ‘outperform’ at RBC Capital Markets.
Market Movers
FTSE 100 (UKX) 7,537.37 -0.87%
FTSE 250 (MCX) 21,557.59 -1.24%
techMARK (TASX) 4,369.74 -0.66%
FTSE 100 - Risers
Reckitt Benckiser Group (RKT) 6,152.00p 5.94%
Fresnillo (FRES) 695.00p 4.29%
Standard Chartered (STAN) 558.00p 1.71%
SSE (SSE) 1,604.50p 1.36%
Ocado Group (OCDO) 1,351.00p 1.34%
Burberry Group (BRBY) 1,994.00p 1.32%
Bunzl (BNZL) 2,740.00p 1.22%
Ferguson (FERG) 11,105.00p 0.45%
Diageo (DGE) 3,616.00p 0.31%
Hikma Pharmaceuticals (HIK) 1,989.50p 0.28%
FTSE 100 - Fallers
Evraz (EVR) 305.30p -7.48%
Abrdn (ABDN) 231.70p -4.18%
International Consolidated Airlines Group SA (CDI) (IAG) 166.30p -4.08%
Rolls-Royce Holdings (RR.) 118.02p -3.04%
Imperial Brands (IMB) 1,754.00p -2.88%
BT Group (BT.A) 195.15p -2.86%
ITV (ITV) 118.25p -2.80%
Prudential (PRU) 1,183.50p -2.67%
Taylor Wimpey (TW.) 148.75p -2.62%
Antofagasta (ANTO) 1,377.50p -2.14%
FTSE 250 - Risers
Ultra Electronics Holdings (ULE) 3,000.00p 4.68%
Indivior (INDV) 268.40p 3.31%
Plus500 Ltd (DI) (PLUS) 1,505.00p 2.93%
FirstGroup (FGP) 106.20p 2.91%
Moneysupermarket.com Group (MONY) 192.30p 2.83%
Endeavour Mining (EDV) 1,840.00p 2.51%
Centamin (DI) (CEY) 94.96p 2.36%
Hochschild Mining (HOC) 103.80p 1.96%
Clarkson (CKN) 3,400.00p 1.95%
Playtech (PTEC) 668.50p 1.75%
FTSE 250 - Fallers
Wizz Air Holdings (WIZZ) 4,276.00p -7.40%
Darktrace (DARK) 319.80p -6.93%
PureTech Health (PRTC) 244.50p -6.50%
Ferrexpo (FXPO) 274.40p -6.41%
Trainline (TRN) 225.00p -5.62%
Petershill Partners (PHLL) 199.60p -5.40%
TBC Bank Group (TBCG) 1,502.00p -5.35%
Trustpilot Group (TRST) 152.10p -5.29%
Spire Healthcare Group (SPI) 225.50p -5.02%