London pre-open: Stocks to drop as Russia-Ukraine tensions escalate
London stocks were set to fall at the open on Tuesday as the Russia-Ukraine crisis escalated.
The FTSE 100 was called to open 54 points lower at 7,430 after Russian president Putin ordered troops into two eastern states in Ukraine.
CMC Markets analyst Michael Hewson said: "In a further sign that Russia appears uninterested in arriving at a diplomatic solution, Vladimir Putin said that Russia would recognise the rebel forces sovereignty over the disputed regions, thus validating their claims to be self-governing. This in turn gives him the cover he needs to invade Ukrainian territory in support of the rebel forces, which he has ordered Russian troops to do to perform a ‘peacekeeping’ role.
"Putting to one side that any move would be in breach of international law; it also blows a hole in the Minsk ceasefire accords and make any chance of an imminent de-escalation even more difficult than it is now.
"Putin went on to claim that the decision to admit Ukraine to NATO had already been taken and that further expansion was only a matter of time. Last night’s speech certainly makes that prospect much more likely and not less. He went on to say that Ukrainian forces should stop their actions against the separatist regions immediately.
"After last night’s laying down of the gauntlet by Putin, the ball is now firmly in NATO’s court, with the very real prospect that sanctions may not be enough, although they will be very much the starting point, as Europe stands on what could be the brink of war."
In corporate news, HSBC's annual profit more than doubled as lower bad debts more than made up for reduced revenue at Britain's biggest bank. Pre-tax profit for the year to the end of December rose to $18.9bn from $8.8bn a year earlier as revenue dipped 2% to $49.6bn.
In the fourth quarter, pre-tax profit rose by $1.3bn to $2.7bn as revenue rose 2% to $12bn and costs fell.
The bank declared a second interim dividend of $0.18 cents a share, taking the annual payout to $0.25 cents - up from $0.15 cents a year earlier but less than the $0.30 cents in 2019. HSBC also said it would buy back $1bn of shares when the current $2bn buyback ends.
InterContinental Hotels Group annual profits more than doubled on the back of a strong final quarter in the US and China as economies recovered from the Covid pandemic.
Operating profit for the 12 months to December 31 more than doubled to $534m as revenue per available room, a key metric, reached 70% of pre-pandemic 2019 levels. A dividend of 85 cents a share was declared after it was pulled the year before.