- FTSE 100 closes 1.62% higher
- Avast falls on merger probe news
- US stocks higher
4.55pm: FTSE 100 closes up
FTSE 100 closed firmly higher midweek following Asia's lead as miners and financial stocks did well as China hinted at economic stimulus measures and there was optimism over peace talks in the Russia-Ukraine war.
Britain's blue-chip index finished up almost 116 points, or 1.62%, at 7,291.68.
Across the Pond, on Wall Street, the Dow Jones Industrial Average added 0.67%, while the S&P 500 gained 1.06% and the Nasdaq advanced 1.92%.
4.00pm: FTSE flying into the close
Leading shares continue to accentuate the positive heading into the close.
Investors have taken heart from hopes of progress in ceasefire talks between Russia and Ukraine, while sentiment has also been helped by Chinese authorities pledging to support financial markets after the recent slump in the wake of further lockdowns in the region.
Michael Hewson, chief market analyst at CMC Markets, said: "China’s pledge to keep its financial markets stable as well as draw a line under its recent interventions on various sectors saw markets in Asia take off this morning. For several months Chinese authorities have taken steps to crack down on certain sectors of its economy, as well as discouraging overseas listings in moves that have hammered valuations.
"Today’s announcement by China’s vice premier Liu He, to call time on those policies, and be more supportive, turbocharged a sharp rise in Chinese stocks with the Hang Seng China Enterprises index closing the day 12.5% higher, while the Hang Seng posted its best day since 2008.
"With Asia markets rebounding so strongly there has inevitably been a ripple out effect into European markets.
"However today’s gains in Europe have also been driven on optimism over peace talk progress after reports emerged that Russia had dropped its demand for Ukraine to surrender, with both said to be in the process of discussing a 15-point peace plan including a ceasefire and a Russian withdrawal if Kyiv declares neutrality. This headline saw stocks move up to session highs, and while the initial move higher proved short-lived after Kyiv came out and rejected the proposals, stocks still appear to be holding up well."
Even the prospect of interest rate rises from the US Federal Reserve later today and the Bank of England tomorrow has not upset the applecart.
So the FTSE 100 is up 116.64 points or 1.63% at 7292.34.
Polymetal International PLC (LSE:POLY) is the biggest riser, up 12.56%.
Just behind is Scottish Mortgage Investment Trust PLC (LSE:SMT), which has a number of Chinese tech investments. Its shares are up 8.92%.
Other companies with interests in China also headed higher.
Burberry Group PLC (LSE:BRBY) is 6.16% better while Standard Chartered PLC (LSE:STAN) is up 5.58%.
But cyber security firm Avast PLC (LSE:AVST) is down 12.89% after its proposed £6bn merger with NortonLifeLock Inc faced an investigation by the UK Competitions and Markets Authority, delaying the completion of the deal.
And defence group BAE Systems PLC (LSE:BA.) is down 4.48%, perhaps on the prospect of peace breaking out.
Utility stocks, a haven in troubled times, are now unwanted, with United Utilities Group PLC (LSE:UU.) down 2.4%.
3.10pm: Polymetal leads Footsie risers after earlier falls
It's been the proverbial rollercoaster ride for investors in Russian companies after the attack on Ukraine, and Polymetal International PLC (LSE:POLY) is no exception.
In fact it has been a rollercoater ride for the gold miner's shares just in the course of today.
Its shares are currently up 16.33% at a high for the day of 151p, making it the biggest riser in the FTSE 100.
But earlier they had slumped as low as 118.85p. There may be worries about liquidity in Russian company shares, but anyone who bought at the low must be pretty happy at the moment.
Overall the FTSE 100 is still on the rise, up 122.47 points or 1.71% at 7298.17.
2.12pm: US markets open in positive territory
US stocks are sharply higher in early trading as investors eyed the Federal Reserve’s decision on an expected interest rate hike.
At the open, the Dow Jones Industrial Average gained 1.2% or almost 400 points, at 33,941, while the tech-savvy Nasdaq Composite surged 2.2%, and the broader S&P 500 added 1.6%.
Among the best-performing stocks Wednesday was Micron Technology, gaining 8.5%, while the coffee retail chain Starbucks jumped 7.2%.
“There will most likely be no commitments today but during the conference, president [of Federal Reserve Jerome] Powell will be asked about the starting point [in the balance sheet] and the pace of balance sheet reduction,” said Walid Koudmani chief market analyst at XTB.
This is the opposite to the QE, or money printing, that was so supportive for stocks so the sooner the reversal starts, the worse news this is for stock markets, noted Koudmani.
On the geopolitical front, Ukraine President Volodymyr Zelenskyy’s comments suggesting progressing peace talks between the two war-torn countries helped boost investors' sentiments.
2.03pm: Oil heads higher again
Oil prices are on the rise again, with Brent crude back above US$100 a barrel.
Brent is up 1.12% at US$101.03 while West Texas Intermediate, the US benchmark, has added 1.58% to US$97.96.
Victoria Scholar, head of investment at interactive investor, said: “Brent and WTI are hovering either side of $100 a barrel as the market attempts to weigh up any further upside impact from the Ukraine war and Russia’s supply shock against downside pressures from progressing peace talks, a strengthening greenback as the Fed raises rates and softening oil demand from China as well as a potential inflation-induced Western economic slowdown.”
The rise comes as Boris Johnson travelled to Abu Dhabi to try and persuade the United Arab Emirates and Saudi Arabia to pump more oil.
Up until now they have stuck to the production targets agreed by Opec+, which includes Russia.
The visit comes days after Saudi Arabia executed 81 men for a range of alleged offences.
12.34pm: US retail sales miss forecasts
US retail sales have come in lower than expected in February, but the previous month's strong figures have been revised even higher.
Sales rose 0.3% last month compared to forecasts of a 0.4% increase.
The January figure of 3.8% is now 4.9%.
Petrol and food saw the biggest sales growth, up 36.4% and 33% year on year respectively.
US Feb retail sales increase 0.3%, ex-autos up 0.2% & control group falls 1.2%. Once inflation accounted for its a bad report. This data was estimated prior to the price shock cascading through the economy following Russian invasion of Ukraine. Big Jan upward revisions to data.
— Joseph Brusuelas (@joebrusuelas) March 16, 2022
11.46am: FTSE 250 outperforms
Leading shares remain in positive territory but are being outclassed at the moment by the mid-cap index.
The FTSE 100 is up 1.33% or 95.49 points at 7271.19 while the FTSE 250 has jumped 2.61% to 20,786.68.
Leading the way is Fidelity China Special Situations PLC (LSE:FCSS), up 11.67% after authorities in China pledged to support financial markets, following a sell-off this week due to lockdown concerns.
Hammerson PLC (LSE:HMSO) is 7.64% higher after the property group and its joint venture partner Canada Pension Plan Investment Board completed the sale of the Silverburn shopping centre near Glasgow to Henderson Park and Eurofund for £140mln in cash.
10.46am: US investors in positive mood
US stocks are expected to open higher as investors await the outcome of the two-day Federal Open Market Committee (FOMC) meeting, where the Federal Reserve is expected to raise interest rates for the first time in four years.
Sentiment has also been boosted by comments from Ukraine’s President Volodymyr Zelenskyy that peace talks with Russia have taken a realistic turn.
Futures for the Dow Jones Industrial Average rose 1.16% in Wednesday pre-market trading, while those for the broader S&P 500 index gained 1.35% and the tech-heavy Nasdaq added 1.92%.
US stocks closed with strong gains on Tuesday as oil prices declined amid the Russia-Ukraine war. The Dow rose sharply by 1.82% to 33,544, while the S&P 500 surged 2.14% to 4,262 and the Nasdaq rallied 2.92% to 12,949.
“A better day for risk appetite, supported in part by some optimism about the negotiations between Russia and Ukraine, as President Zelensky asserted that “the positions in the negotiations already sound more realistic” and one of his advisers said that there’s room for compromise," commented Daiwa Capital Markets analyst Chris Scicluna.
Scicluna noted that investors have also welcomed a statement from Chinese authorities that government departments should “actively introduce policies that benefit markets” and acknowledged the need to boost the economy.
“This evening’s FOMC announcements seem bound to bring the first Fed rate hike since 2018, with the target range highly likely to be increased by 25bps to 0.25-0.50%," Scicluna added. "Updated economic forecasts will offer some insights into the Fed’s judgement on the impact of the Ukraine conflict on the US economy; the dot plots will also offer guidance to the expected pace of tightening over the months ahead; markets currently pricing seven hikes this year.”
Back in the UK the FTSE 100 is off its best but still well in the green.
The leading index has added 1.03% or 73.86 points to 7249.56.
9.49am: China pledge on markets helps investor sentiment
Another factor supporting global markets is China saying it would unveil fresh policies to boost sentiment in financial markets, in the wake of this week's share price falls prompted by further lockdowns.
Russ Mould, investment director at AJ Bell, said: “After a big sell-off in Chinese stocks on Monday and Tuesday, Beijing has stepped in with pledges of support to try and stabilise markets. This has resulted in a big rebound in the Hong Kong Hang Seng index, up 9.1%, and a massive rally in some of the names worst affected in the sell-off including Tencent (+23%) and Alibaba (+26%).
“Chinese stocks had been hit by fears that the economy would suffer from renewed lockdowns and disruption to the electronics manufacturing hub of Shenzhen, further deterioration in the real estate sector amid bad debts, and the country potentially providing support to Russia in its war on Ukraine. These factors added to existing pressures around tighter regulatory interference on various sectors and whether Chinese companies should still be allowed to list their shares on overseas markets.
“Now Beijing has vowed to introduce policies that benefit markets although the big unknown is still whether the country will side with Russia.
“Investors around the world have increasing put money into Chinese stocks as this market is where some of the best earnings growth stories have been found. Last year’s regulatory clamp-down on internet firms and other sectors soured the appeal of the region to investors but earlier this year sentiment started to improve again.
“The speed at which Beijing has responded to this week’s sell-off would suggest it doesn’t want to let things drift out of control. Its key goal is common prosperity and stock markets matter because a lot of Chinese retail investors have money in equities, so their wealth is at stake if shares are plummeting in value."
9.25am: Markets more hopeful on Ukraine conflict resolution
Hopes that peace talks between Russia and Ukraine can lead somewhere, following remarks from Ukrainian president Volodymyr Zelenskiy, are helping to give some support to markets.
The FTSE 100 is currently up 82.07 points or 1.14% at 7257.77.
Victoria Scholar, head of investment, interactive investor says: “Optimistic comments from president Zelenskiy who said peace talks are starting to ‘sound more realistic’ while conceding that Ukraine will not join Nato have helped to lift risk sentiment across equity markets with sharply positive momentum across Asia carrying forward into the European equity session.
"Travel and leisure, autos and financials are leading the gains in Europe with all major bourses in the green.”
Less positive is the London nickel market, where trading has been halted again not long after it reopened today following a rare suspension a week ago.
With Russia accounting for around 10% of the market for nickel, which is used for electric vehicle batteries among other things, the price suffered wild swings last week before the market shut down.
The London Metal Exchange has imposed a 5% limit on nickel price movements, but now there appears to be another halt in trading.
Scholar said: “Nickel has opened lower by more than 8%, attempting to play catch up after a week-long trading halt on the London Metal Exchange. However, today’s move of more than 5% meant the commodity was temporarily suspended once again, having surpassed its downside limit.
"Having surged more than 50% last week pushing above $100,000, the commodity looks set to further wild swings and trading halts as the exchange desperately attempts to calm the disorderly price action and reinstate confidence in the volatile and messy market.”
8.41am: Scottish Mortgage benefits from Nasdaq recovery
Among the early risers, tech investor Scottish Mortgage Investment Trust PLC (LSE:SMT) has climbed 5.89% following the 2.92% gain on the US Nasdaq market.
Companies hit by the lockdowns in China have recovered some lost ground, with Prudential PLC (LSE:PRU) up 3.75% and Standard Chartered PLC (LSE:STAN) up 3.18%.
The mining sector, which subsided on Tuesday on worries about a slowdown in the world's second-largest economy and major commodity consumer, is also showing signs of rebounding, with Rio Tinto PLC (LSE:RIO) rising 2.86%.
British Airways owner International Consolidated Airlines Group (LSE:IAG) has climbed 3.27% after some positive updates from the sector.
Overall the leading index is currently up 97.95 points or 1.37% at 7273.65.
Richard Hunter, head of markets at interactive investor, said: "There was a broad mark up across most sectors, including airline-related stocks, but also among some of the cyclical sectors which have more recently been under strong pressure. The opening hike leaves the FTSE100 down by just 1.5% in the year to date."
8.27am: Competition authorities wade into Avast merger with NortonLifeLock
Cyber security company Avast PLC (LSE:AVST) is the biggest faller in the leading index after its proposed merger with NortonLifeLock Inc hit an unexpected stumbling block.
The deal was expected to be completed by 4 April, but the UK Competition and Markets Authority has stepped in and said it would refer the merger to a Phase 2 investigation unless the two sides made certain undertakings.
NortonLifeLock seems in no mood to make any such undertakings. It said it regarded the decision as surprising.
It said: "The parties believe that the merger can only benefit consumers across the globe, including in the UK, through increased innovation and greater consumer freedom and choice beyond big tech platform providers in the burgeoning Cyber Safety market.
"Regulators from across the globe, including the US Department of Justice, the German Federal Cartel Office and the Spanish National Markets and Competition Commission, have reviewed and cleared the merger. NortonLifeLock remains confident that the merger should be approved and does not intend to propose any Phase 1 remedies. The parties will continue to engage constructively with the CMA and their review."
It now expects the deal to complete in mid-to-late 2022.
8.13am: Positive start for Footsie
Leading shares have taken their cue from a recovery in US and Asian markets after this week's earlier declines.
The FTSE 100 has climbed 80.92 points or 1.13% in early trading to 7256.62.
But the mood is still cautious, not least because there is no easy resolution to the Ukraine crisis even though there appear to be some optimistic noises surrounding peace talks.
Russia is due to make interest rate payments on bonds later today, and there are suggestions it might default given the moves to lock it out of the global economic system in the wake of the invasion.
Ipek Ozkardeskaya, senior analyst at Swissquote, said: "Russia is due to pay $117mln in interest on its dollar-denominated bonds today, and the failure to service debt could lead to a massive $150bn default next month. Russia has means to pay back the interest, yet they can’t pay in US dollars that they can’t access.
"A default could be a blow to the banking stocks due to their exposure to the Russian debt, because the latter was investment grade just a couple of weeks ago. The good news is, though an eventual Russian default will give a shake to the financial markets, it is not a systemic threat to the global economy."
On top of that are concerns about the spread of the Omicron virus in China, and the effect of the renewed lockdowns on the economy.
On the positive side, health authorities have reported a slight drop in new cases compared to the previous day.
And then there is the Federal Reserve, which is expected to raise interest rates later for the first time since 2018. All eyes will be on the comments and the Fed's dot charts showing how many more rate rises are expected in the coming months.
Before the Fed announcement come the latest US retail sales figures. These jumped by 3.8% in January after a big fall in December, and the February figure is expected to show another rise, albeit at a much slower rate of 0.4%.
6.50am: UK market set for a rebound
The FTSE 100 is predicted to start more than 1% higher on Wednesday, taking a lead from Wall Street which rallied on hopes that inflationary pressures may have peaked.
CFD firm IG Markets this morning calls the London benchmark 91 points higher, making a price of 7,263 to 7,266 with just over an hour to go until the open.
US economic data, producer price index (or PPI), last night came in softer than expected whilst oil prices hovered close to US$100 per barrel.
Today’s Federal Reserve meeting, which for the first time in about four years is expected to see an increase in interest rates, boosted sentiments – albeit it may prove a brief respite.
“European markets look set to open higher this morning, however any rally is likely to find itself pushing against the headwinds of headlines out of Ukraine, as well as the prospect that Russia might default on a bond payment later today,” said Michael Hewson, analyst at CMC Markets.
He added: “This week’s growth and inflation forecasts are likely to be significant in that context as markets look to price the prospect of how aggressively the Fed might tighten monetary policy over the next few months.
“Before the Russia invasion of Ukraine some market pricing was suggesting we might see seven rate rises this year, and while some are suggesting that might not happen now, there is an argument that it might be the lesser of two evils.”
On Wall Street, the Dow Jones last night finished with a 599 points or 1.82% gain at 33,544 whilst the S&P 500 rallied more than 2% to close at 4,262. The Nasdaq went higher still, climbing 2.92% to 12,948.
The small-cap centric Russell 2000 index meanwhile added 1.4% to 1,968.
Around the markets
The pound: US$1.3056, up 0.11%
Gold: US$1,914, down 0.17%
Silver: US$24.83, down 0.46%
Brent crude: US$102.57 per barrel, up 2.6%
WTI crude: US$98.50 per barrel, up 2.1%
Bitcoin: US$39,462, up 1.7%
Ethereum: US$2,640, up 3.5%
6.50am: Early Markets - Asia/Australia
Hong Kong’s Hang Seng index surged 9% in Wednesday afternoon trade after tumbling nearly 6% on Tuesday to close at its lowest since February 2016.
The Shanghai Composite in China jumped 3.36% and Japan’s Nikkei 225 lifted 1.64%.
South Korea’s Kospi gained 1.44%.
Australia’s S&P/ASX200 ended the day 1.1% higher, helped by a broad-based rally led by technology shares.