- FTSE 100 adds 4 points at the close
- Barclays on the rise
- Miners mixed
4.50pm: FTSE closes in the green
The FTSE 100 ended the day only just in positive territory, closing at 7,498 points for a 0.1% gain on the day.
OANDA's Craig Erlam said that markets are now in "wait and see" mode with regards to Russia's next move in the Ukraine crisis.
"Tensions have obviously increased this week following Putin's decision to recognise the independence of two separatist regions in Ukraine but investors are not particularly deterred," Erlam said.
"We've seen plenty of risk aversion at times in recent weeks as the situation has escalated but as we've seen over the last 24 hours, the dips are still attracting interest. As long as both sides continue to claim a desire to find a diplomatic solution and troops remain on the right side of the border, we could continue to see these kinds of rebounds."
4.09pm: Ukraine cyber attack and state of emergency spook markets
Here's Michael Hewson of CMC Markets on the turnaround in sentiment as European markets head towards the close.
He said: "Markets in Europe at one point today appeared to be putting to one side their concerns about events in eastern Ukraine for the time being, choosing instead on a raft of decent company updates, and the positives of a series of sanctions that were lighter than expected.
"The news that Ukraine is implementing a 30-day state of emergency didn’t appear to undermine the more bullish mood in the morning session; however this changed in the afternoon session, when the DAX, which had been leading today’s move higher, saw all of its gains wiped out in 30 minutes after reports that Ukraine was experiencing a DDOS attack, in what could be a precursor to an invasion.
"The Ukrainian government then released the details of its state of emergency, which starts at midnight tonight, calling up all its reservists, as well as imposing restrictions on movement throughout the country, in a sign that it expects to see an imminent escalation, pulling European markets down as we head into the close, with the FTSE 100 trying to hang on to at least some of its gains.
"This change of tone perfectly encapsulates the clear and present danger of headline risk with respect to market ebb and flow, as investors nervously eye Russia’s next move."
As the stock market gets the jitters, oil has bounced back.
Brent crude is now up 1.09% at US$97.90 a barrel while West Texas Intermediate has added 1.1% to US$92.92.
3.50pm: UK market remains in the green - just
Leading shares remain in positive territory but they are well off their best levels.
The FTSE 100 is now up 12.17 points or 0.16% at 7506.38 after earlier hitting 7549, perhaps spooked by reports of another cyber attack starting in Ukraine.
Certainly Wall Street seems concerned, with all three main indices now in the red after a positive start.
The Dow Jones Industrial Average is down 0.25%, the S&P 500 is off 0.35% and the Nasdaq Composite has lost 0.61%.
So far today the UK market had taken the prospect of further conflict in Ukraine, sanctions on Russia and rising gas prices pretty much in its stride.
But there is still enough uncertainty around to give investors concern.
Among the risers is Barclays PLC (LSE:BARC), up 3.9% after its profits more than doubled.
Antofagasta PLC (LSE:ANTO) has added 3.49% on further consideration of this week's results.
But Russian miner Evraz PLC (LSE:EVR) is heading the other way, down 10.31% on concerns about the effects of sanctions by the West.
3.06pm: US markets higher at the open
US markets opened in the green a day after the S&P ended in the correction territory amid escalating geopolitical tensions between Russia and Ukraine, leading the US to impose sanctions against Moscow.
The S&P 500 recovered its losses, gaining 0.5% at 4,318, while the Dow Jones Industrial Average gained 0.2% or 70 points, at 33,667, and the tech-heavy Nasdaq Composite was up by 0.2%.
“Stock markets are back in positive territory on Wednesday as investors await Russia's response to initial sanctions from the West,” said Craig Erlam, senior market analyst, UK & EMEA, OANDA.
Erlam noted that as long as both sides continue to claim a desire to find a diplomatic solution and troops remain on the right side of the border, "we could continue to see these kinds of rebounds.”
“Markets have come under heavy pressure this year and investors are going to be tempted back in at these levels,” he added.
Investors are experiencing heightened pressure and market volatility ahead of threats of the Ukraine-Russia war, as well as the potential Federal Reserve interest rate hikes— likely to be bumped by at least 25 point basis in the mid-March meeting.
Back in the UK, the FTSE 100 is currently up 31.75 points or 0.42% at 7525.96.
2.23pm: German consumer confidence slips
Consumer confidence in Germany has slipped further, according to the latest report, and this before the Ukraine crisis took a turn for the worse and the Nord Stream 2 pipeline was put on hold.
The March consumer sentiment index from research group GfK is expected to fall to -8.1 points, down from -6.7 points this month.
Gfk said as recently as the previous month, it looked as if consumer sentiment might recover. But the sharp rise in infection rates at the time of the survey, combined with high inflation, caused the consumption indicator to slip again.
Rolf Bürkl, GfK consumer expert, said: “Above all, expectations of a significant easing in price trends at the beginning of the year have been shattered for the time being, as inflation rates continue to hover at a high level.
“Nevertheless, the outlook for the coming months is quite positive: Only recently it was decided to lift profound pandemic restrictions. This gives cause for hope that consumer spending will also return as a result. If this were to be supported by moderate price inflation, consumer sentiment could finally recover in the long term as well.”
12.54pm: Bank governor says financial firms should show restraint on bonuses
Bank of England governor Andrew Bailey (in)famously said workers should exercise wage restraint even though inflation is at a thirty year high, and was roundly criticised for that.
At today's Treasury Select committee hearing he maintained the comments were aimed at preventing inflation becoming more entrenched in the economy, with price rises and wage increases making that clearly a risk.
But he admitted: "It’s those with least bargaining power in the labour market that lose out in this situation."
In answer to questions from MPs, Bailey - who seemed to struggle to remember the exact amount he earned (£575,538 a year as it happens) - said his message also covered bank bonuses and executive pay.
He called for the banks to show restraint, ironically just as they are hiking their bonus pools.
Like his colleague Dave Ramsey yesterday, Bailey hinted at further interest rate rises to come if inflation remained high.
And the current situation regarding Ukraine is not helping, pushing up already sky high energy prices even further.
Ahead of the meeting with MPs the Bank's Jonathan Haskel wrote in a report for the committee: "An upside risk to the inflation forecast could arise from geopolitical events. Commodity markets typically respond to geopolitical risk in a variety of ways (e.g. oil prices rise).
"However, if certain geopolitical events specifically affect the commodity supply chain, it could create substantial price volatility. At the time of writing, there seems a material risk of further increases in global gas prices which would only add to the already considerable rises in CPI inflation we have seen so far."
11.43am: US markets soothed by limited nature of Russia sanctions
US stocks are expected to open higher, recovering some of their losses after the European Union and countries including the US, the UK and Japan imposed only moderate sanctions on Russia after President Vladamir Putin sent troops to two breakaway regions of Ukraine.
Futures for the Dow Jones Industrial Average rose 0.5% in Wednesday pre-market trading, while those for the broader S&P 500 index gained 0.58% and the tech-heavy Nasdaq added 0.88%.
US equities closed lower on Tuesday amid the Russia-Ukraine standoff, with concern that the geopolitical tensions may also lead to supply chain issues, adding to inflationary pressures as the Federal Reserve prepare to raise interest rates as early as March.
At the close, the Dow Jones Industrial Average fell 1.42% to 33,597, while the S&P 500 was down by 1.01% at 4,305, and Nasdaq Composite shed 1.23% at 13,382.
“Markets are peeking out from behind the risk-off curtain, as sanctions announced by the US, UK, and Europe against Russia didn’t live up to the market’s worst fears,” commented Han Tan, chief market analyst at Exinity Group.
“Most Asian markets are rising alongside European and US equity futures, as equity bulls attempt to pull the S&P 500 out of a technical correction once more.”
Tan noted that safe havens have moderated with spot gold easing back below $1,900, Treasury yields are pushing higher, and the dollar is ceding ground to most of its G10 peers.
“Instead of sending the strongest message possible, the first tranche of sanctions by Western allies are seen as mere thumbtacks that only induce limited discomfort on Russia, at least for now. Some of the sanctions on Russian banks are largely symbolic and have limited impact on its financial dealings with the rest of the world.”
Although Ukraine’s Western allies have highlighted further scope for economic retaliation, Tan said Tuesday’s announcements suggest more leeway for Russia in the interim, noting that the EU’s measures still require confirmation from member states, while US lawmakers continue wrangling over a bipartisan package of Russian sanctions.
Meanwhile the FTSE 100 remains positive, up 22.91 points or 0.31% at 7517.12.
11.08am: Hargreaves Lansdown recovers some lost ground
Leading shares continue to tick along as investors await the latest developments in Ukraine.
The dividend boosts from Barclays and Rio Tinto are providing some support, with the FTSE 100 now up 34.13 points or 0.46% at 7528.34.
Hargreaves Lansdown PLC (LSE:HL.), which fell sharply after Tuesday's results, has recovered some ground.
Its shares are up 3.11% at 1129p after some positive broker notes.
Credit Suisse issued an outperform rating although it cut its price target from 1590p to 1530p.
Bank of America (NYSE:BAC) said buy but also moved its target down from 1625p to 1450p.
10.22am: Kingfisher leads the losers after a downgrade
Leading shares have come off their best levels but are still in positive territory.
The FTSE 100 is now up 25.91 points or 0.35% at 7520.12, having earlier climbed as high as 7548.
AJ Bell investment director Russ Mould said: “So far the sanctions imposed by the West [on Russia] aren’t as heavy as might have been expected and the market is apparently taking this a win amid hints Putin might be open to a diplomatic solution.
“However, predicting the Russian premier’s next move is a mug’s game and unfortunately until the situation is resolved the markets are likely to remain firmly on the edge."
Among the fallers Evraz PLC (LSE:EVR) is down 0.64% on the uncertainty over Russia and Ukraine.
But the biggest loser in the leading index is Kingfisher PLC (LSE:KGF, down 2.87% at 304.2p after analysts at SocGen moved from hold to sell and cut their price target from 319p to 288p.
Also lower is Coca Cola HBC AG (LSE:CCH), off 1.1% after this week's results.
9.56am: Crude slips back from its highs
Oil has been heading higher on concerns about supply issues if the Ukraine situation gets any worse, with Brent a whisker away from US$100 a barrel.
But cautious optimism that a peaceful resolution may yet be found has seen crude slip back a little.
Brent is currently down 0.71% at US$96.15 while West Texas Intermediate, the US benchmark, is off 0.84% at US$91.14.
But analysts believe that continuing geopolitical issues and growing demand as economies recover from the pandemic mean it is only a matter of time before the triple digit barrier is breached.
9.14am: Antofagasta climbs but Rio slips despite hefty dividend
It's a mixed picture for the mining sector at the moment.
Rio Tinto PLC (LSE:RIO) has announced record earnings and one of the biggest ever FTSE 100 dividends.
Yet investors seem unimpressed, with its shares down 0.26%.
Victoria Scholar, head of investment at interactive investor said: “Rio Tinto [reported] record underlying full-year earnings of $21.38bn, ahead of analysts’ expectations and the second biggest dividend in FTSE 100 history at $16.8bn, thanks to a strong economic rebound from China post pandemic and bullish underlying commodity markets.
"The world’s leading iron ore producer reported EBITDA of $37.7bn rising 58% on revenues of $63.5bn, in line with analysts’ expectations.
"The mammoth dividends coming out of the mining sector from BHP, Glencore, Antofagasta and now Rio Tinto have solidified the mining sector as the go-to destination for income seeking investors. The sector has also become a successful way to navigate the inflationary backdrop with rising commodities and raw material prices coupled with supercharged demand from China providing a tailwind for the sector.”
But Russ Mould at AJ Bell said: "The big question now is whether Rio’s dividends and earnings have peaked in the current commodities cycle. There are plenty of headwinds to suggest global economic growth may slow and forecasts would suggest Rio’s dividends are going to get progressively smaller over the next three years, though that is no doubt a reflection of special dividends being less generous and then not happening at all as it reverts to only paying ordinary dividends.
“The other point to consider is whether Rio is getting itchy to do a mega deal. Miners have been surprisingly restrained with acquisitions, but history would suggest the point at which everything is looking rosy is exactly when they go on a spending spree. They risk buying assets at the top of the market and then lamenting the disappointing returns in subsequent years.”
Meanwhile Polymetal International PLC (LSE:POLY) is down 1.05% on concerns about any impact from the actions taken against Russia by the West.
But Antofagasta PLC (LSE:ANTO) has added 3.77% in the wake of this week's results, making it the biggest riser in the leading index.
Overall the FTSE 100 continues to climb, up 42.34 points or 0.56% at 7536.55.
8.39am: Difficult to say sanctions are aggressive - UBS
More on the actions against Russia over Ukraine.
Paul Donovan, chief economist at UBS Global Wealth Management, said: "Some have described sanctions against Russia as 'more aggressive'. This is difficult to argue for the macroeconomic impact.
"Germany closed a pipeline that was not open. Japan banned sovereign debt issuance that does not take place. The US pledged to stop the Russian government accessing international finance they do not really need. The UK has focused on threatening to do more in the future.
"Financial market reactions are more about fear of future action than pricing in current action."
8.17am: UK market shrugs off conflict concerns
Leading shares are in positive territory in early trading, as investors try to assess the news from Ukraine after Russia ordered troops into the east of the country and the West responded with sanctions, albeit rather tame ones so far.
Ipek Ozkardeskaya, senior analyst at Swissquote, said: "The market focus remains on Ukraine and Russia, as the US warns that Russia moving its army to the separatist regions in Donbas could mean a larger-scale invasion in the coming days. Russia is suffering from a first round of sanctions. The Nord Stream Pipeline project, which has been one of Putin’s priorities, has been put to coma, and Britain announced some sanctions targeting the banks...
"More sanctions are expected in the coming days, but the measures that have been announced so far are not as heavy as feared.
"The market mood is not cheerful but the softer-than-feared sanctions somewhat help lifting the mood. The risk appetite is limited, of course, except in some key assets including oil and commodities."
Reports that Russian President Vladmir Putin said he was open to a diplomatic solution in an address this morning has prompted hopes that further conflict can be avoided.
Meanwhile the International Monetary Fund said it would start a virtual mission to Ukraine which could lead to a US$700mln loan to help shore up the country's economy.
So the FTSE 100 is up 37.02 points or 0.49% at 7531.23.
Barclays PLC (LSE:BARC) is among the risers after the bank more than doubled its annual profits to £8.4bn, increased its dividend to shareholders and boosted its bonus pool by more than 17%.
But it froze share awards for Jes Staley, the former chief executive who stepped down after an investigation by the City watchdog into how he described his links with sex offender Jeffrey Epstein.
Its shares are up 2.6% at 195.1p.
Richard Hunter, head of markets at interactive investor, said: “Amid a banking results season which has so far been light of cheer, Barclays has managed to nudge the dial somewhat.
"In terms of momentum, the picture is positive, with most fourth quarter metrics not only improving but also being ahead of expectations. For the year as a whole, there is also a general movement towards progress, although as ever some metrics will need to be watched more closely.
"Pre-tax profit for the year of £8.4bn is reportedly a record for the bank and is a significant improvement from the previous year’s number of £3.1bn. As has become the theme over the last year for the banks, the release of bad debt provisions is a major driver to profits given an improving economic backdrop and a relatively benign credit environment. For Barclays, the release of credit impairments totalling £653mln compares to a charge of £4.8bn in the previous period."
6.45am: Markets cautious as Ukraine crisis continues
The FTSE 100 is seen slightly higher ahead of Wednesday’s open as global asset markets continue to be pulled pillar to post by the conflict in Ukraine.
CFD and spreadbetting firm IG Markets sees the blue-chip benchmark up around 8 points higher, making a price of 7,501 to 7,504 with just over an hour to go until London’s open.
It comes as markets react to the quick moving situation in Ukraine and the reactions by governments in the West.
Last night, New York’s Dow Jones shed some 480 points or 1.4% to finish at 33,596 whilst the S&P 500 was 1% lower at 4,304.
The Nasdaq fell 1.23% to close at 13,381 and the small-cap focussed Russell 2000 index lost 1.45% to 1,980.
In Asia, Japan’s Nikkei was down 1.7% at 26,449 and Hong Kong’s Hang Seng moved positively, adding 151 points or 0.6% to 23,671. The Shanghai Composite meanwhile gained 0.86% to 3,486.
Closer to home, some attention is still on inflation and interest rates as central bankers give fresh signals later today.
“Yesterday we heard from Bank of England deputy governor Dave Ramsden who warned that he expects to see further tightening in the months ahead,” commented CMC Markets analyst Michael Hewson.
“He was one of the MPC members who voted for a 50bps rate hike earlier this month and appears to suggest that while any decision on further hikes is finely balanced, he probably hasn’t changed his mind on further tightening in the short term. He did, however, push back on market expectations of faster increases, although we can still expect to see another 25bps when the MPC meets on March 17th
“Later today we get to hear from Bank of England Governor Andrew Bailey, as well as MPC members Ben Broadbent, Jonathan Haskel and Silvana Tenreyro when they testify to MPs on the Treasury Select Committee, with the topic of interest rates, and the cost of living likely to be on the agenda."
Around the markets
The pound: US$1.3596, up 0.08%
Gold: US$1,896 per ounce, down 0.08%
Silver: US$24.07 per ounce, down 0.06%
Brent Crude: US$96.65 per barrel, up 1.3%
WTI Crude: US$91.76 per barrel, up 0.18%
Bitcoin: US$38,005, up 3.1%
Ethereum: US$2,659, up 5.5%