Europe midday: Shares surge as Russia sanctions not as harsh as feared

The pan-regional Stoxx was up almost 2% by midday. US stocks swung sharply to a strong finish on Thursday as President Joe Biden unveiled new sanctions against Russia which targeted its banks but not did not block it from a the Swift global payments system or hit its valuable energy sector.

However, US stocks futures were down lower as Russian forces started to approach the Ukrainian capital of Kyiv.

Russia on Thursday launched an attack on Ukraine via land, air and sea, hitting financial markets. Ukraine’s Foreign Minister Dmytro Kuleba said the capital of Kyiv was hit with “horrific” Russian rocket strikes early Friday morning, with several reports of explosions being heard around the city.

Oil prices fell back below $100 a barrel after a surge on Thursday as investor worries over supply disruptions eased. Brent crude fell to $98.7 a barrel, while US West Texas Intermediate crude was down to $92.64.

Gold, traditionally a safe haven in times of geopolitical tension, climbed to $1,908.

In equity news, shares in UK educational publisher Pearson surged 11% as the company reported higher profits and issued a strong outlook.

Polish stocks were in focus, with banks higher on news that cutting Russia out of the Swift international payments system would only be used as a last resort. Bank Polska Kasa, Powszechna Kasa Oszczednosci Bank were up 15% and 12% respectively.

Anglo-Russian precious metals miner Polymetal rose almost 7% more than 10% after heavy losses on Thursday on fears of production disruption and sanctions.

Automakers were also in favour, with Porsche and Volkswagen ahead as they issued details of a possible Porsche listing.

Swiss Re fell as the reinsurance company swung to a smaller-than-expected full-year profit in 2021.

Shares in Valeo were down 10.97% as the auto supplier warned that its margins would fall this year before improving in 2025.