- FTSE 100 closes up 64 points
- Barclays continues to fall
- Tesco and Sainsbury see sales decline
4.55pm: FTSE closes higher as peace talks spark optimism
The UK's blue-chip index closed nearly 0.9% higher on Tuesday at 7,537 points after encouraging signs from Istanbul between Russian and Ukrainean negotiators.
Some signs of potential areas of agreement are appearing, says Chris Beauchamp, chief market analyst at online trading platform IG.
“While early days yet, the positive noises coming from talks in Turkey have helped stock markets to move higher, while oil prices are coming under pressure for a second day.”
4.10pm: Footsie remains positive heading into the close
Hopes of a peace deal between Russia and Ukraine after the latest talks continue to support markets.
In Europe, Germany's Dax is up 2.56% and France's Cac has climbed 2.85%.
Given the preponderance of commodity companies in the UK's leading index, the subsequent fall in the oil price means it is being held back compared to its European peers.
Nevertheless, the FTSE 100 remains in positive territory, up 59.11 points or 0.79% at 7532.25.
Chris Beauchamp, chief market analyst at IG, said: "Today’s market has the feel of trades being unwound, as short positions in stocks are closed, and latecomers to the oil rally are chased out, following news that Russia was continuing to scale back operations around Kiev and that talks between the two sides continued to provide some progress. Russian forces are being redeployed towards eastern Ukraine it seems, which suggests that the attempt to overrun the whole country, or at least seize the capital, has been halted for the time being.”
“European markets rallied hard on hopes of some kind of deal being hammered out that allows both sides to save face, and oil prices dropped on hopes that supply will recover, although it is unlikely that sanctions will end soon given Western wariness about rushing back to normal relations with Putin. The economic outlook is still not promising, either, and with US earnings season looming there is still doubt that equities can hold on to their recent gains.”
BP PLC (LSE:BP.) is down 2.74% as Brent crude falls 3.15%, while Anglo American PLC (LSE:AAL) is off 2.61%.
Also proving a drag is Barclays PLC (LSE:BARC), down 3.08% as a major investor reportedly off-loaded part of its stake.
3.15pm: US consumers more confident
US consumer confidence has edged up in March, and by slightly more than expected.
Lynn Franco, senior director of economic indicators at The Conference Board, said: “Consumer confidence was up slightly in March after declines in February and January.
“The Present Situation Index rose substantially, suggesting economic growth continued into late quarter one. Expectations, on the other hand, weakened further with consumers citing rising prices, especially at the gas pump, and the war in Ukraine as factors. Meanwhile, purchasing intentions for big-ticket items like automobiles have softened somewhat over the past few months as expectations for interest rates have risen.”
“Nevertheless, consumer confidence continues to be supported by strong employment growth and thus has been holding up remarkably well despite geopolitical uncertainties and expectations for inflation over the next 12 months reaching 7.9% - an all-time high. However, these headwinds are expected to persist in the short term and may potentially dampen confidence as well as cool spending further in the months ahead.”
US CB Consumer Confidence Mar: 107.2 (est 107.0; prev R 105.7)
- Present Situation: 153.0 (prev R143.0)
- Expectations: 76.6 (prev R 80.8)
- 1-Year Consumer Inflation Rate Expectations: 7.9% (prev R 7.1%)
— LiveSquawk (@LiveSquawk) March 29, 2022
Meanwhile job openings slipped back but were still higher than forecasts.
US JOLTS Job Opening Feb: 11266K (est 11000K; prev R 11283K)
— LiveSquawk (@LiveSquawk) March 29, 2022
3.01pm: Ceasefire hopes lift US markets
US stocks started higher on Tuesday as markets were buoyed over talks between Ukraine and Russia.
The Dow Jones Industrial Average advanced 350 points at 35,308 in early deals.
The S&P 500 gained around 25 at 4,611, while the Nasdaq gained around 170 points at 14,525.
Oil prices were heading lower as a result too of optimism over a potential ceasefire, with West Texas Intermediate dropping 6.2% and Brent crude slipping 5.9% per barrel.
2.45pm: Footsie outperformed by European markets
The UK market is still well in positive territory but it is being held back a little by commodity stocks after the fall in oil.
So it is being outperformed by European markets, which have surged after reports that Russia planned to scale back its military presence in Ukraine.
Germany's Dax is up 3.16% while France's Cac has climbed 3.35%.
The FTSE 100 in contrast is up 79.24 points or 1.06% at 7552.38 having earlier climbed as high as 7584.
1.30pm: Brent falls on hopes of progress after peace talks end
The oil price is heading lower on reports that Russia will be scaling back its military activity in Ukraine.
As peace talks in Istanbul ended after around four hours, Russia’s deputy defence minister Alexander Fomin said on television that Moscow would “fundamentally cut back military activity in the direction of Kyiv and Chernihiv” in order to “increase mutual trust for future negotiations to agree and sign a peace deal with Ukraine.”
Brent crude, which had edged higher earlier, is now down 4.33% at US$107.61 a barrel.
Naeem Aslam, chief market analyst at Avatrade, said: "The fact that Russia is going to scale back its military presence near Kyiv is excellent news, and hence we see traders backing riskier assets.
"As for the oil price, it has plunged and trading sharply lower because if the conflict comes to an end, we are likely to see fewer issues with Russian energy. Yes, it will not be that easy to roll back those sanctions, and traders are aware of that fact; however, there will be no further sanctions, and this is a good sign in terms of oil supply."
1.10pm: UK consumer borrowing jumps in February
UK consumers borrowed an additional £1.9bn in consumer credit last month, according to the latest figures from the Bank of England.
Some £1.5bn of that was new lending on credit cards. The rest came from other forms of consumer credit such as car dealership finance and personal loans.
Net lending for consumer credit was strong in February; £1.5bn came from credit cards. pic.twitter.com/lnRtMpmsjq
— Keith Church (@keithbchurch) March 29, 2022
...while card repayments were £2.1 billion lower. Net lending rose because people didn't pay off as much of their credit card bills. And the cost of living crisis is of course worsening. pic.twitter.com/JIcNZ2h5J8
— Keith Church (@keithbchurch) March 29, 2022
Mortgage approvals for house purchases fell slightly to 71,000 in February, from 73,800 in January, but remain above the 12-month pre-pandemic average up to February 2020 of 66,700.
Back in the markets, and the FTSE 100 is still putting in a strong performance.
The leading index is up 103.01 points or 1.38% at 7576.15, with eyes on the progress of the peace talks between Russia and Ukraine currently taking place in Istanbul.
Craig Erlam, senior market analyst at OANDA, said: "Stock markets across Europe are rallying on Tuesday, buoyed by positive noises coming from Turkey where Ukraine and Russia may be nearing a ceasefire agreement.
"While there are reportedly still plenty of gaps in the demands of the two teams, there appear to have been compromises found on some big issues including Ukraine's previous ambitions of NATO membership. The next couple of days could be crucial but the signs are promising which we're seeing reflected in the markets today."
11.56am: Recent oil price weakness to help US markets
US stocks are seen opening higher on Tuesday as concerns over runaway inflation were partly allayed by a recent softening in oil prices.
China’s imposition of a COVID-19-related lockdown in the key financial hub of Shanghai, a city of nearly 30 million, has been the main factor driving oil prices lower. Investors believe the lockdown will dampen demand for oil in China which is among the world’s largest importers of crude oil.
Futures for the Dow Jones Industrial Average and those for the S&P 500 were both 0.4% higher. Contracts for the tech-heavy Nasdaq-100 were also up 0.4%.
“Shanghai lockdown combined with the rising Covid cases in China boosted worries that the fresh health crisis could extend and further weigh on Chinese oil demand – but the temporary fall in Chinese demand should do little to the demand-supply dynamics in the medium-term, which remains in favour of bullish market conditions,” said Ipek Ozkardeskaya, senior analyst at Swissquote.
After heavy falls on Monday, benchmark Brent crude futures have recovered a little, up 0.8% at US$110.38 a barrel. Gold futures were down 1.4% at $1912.20 an ounce.
“Many oil traders predict that the price of a barrel could reach US$200 by the end of the year. But we are not there yet. The barrel of US crude is still capped below the US$130 level, and the global demand is expected to reach a record in the second half of the year,” Ozkardeskaya added.
Markets will also be watching upcoming US economic data for further signs that monetary policy may be tightened quickly, notably, US consumer confidence figures due later today.
Elsewhere, talks between Russia and Ukraine being held in Istanbul will also be in focus for signs of any progress towards peace at a time when Russia’s invasion of Ukraine has already entered a second month.
Back in the UK, the FTSE 100 is up 101.47 points or 1.36% at 7574.61, its highest level since the week before the Russian invasion of Ukraine.
11.08am: Barclays under pressure, Admiral gains
More on Barclays PLC (LSE:BARC), now down 3.33% at 155.14p as a major investor sold shares in the wake of Monday's announcement from the bank about a blunder in the US bond market.
The sale was for around £900mln of stock, according to Bloomberg, at a price of around 150p a share, with Goldman Sachs (NYSE:GS) doing the business.
The Qatar Investment Authority is a big holder and has recently been selling some of its various stakes, but it is unclear if it is the Barclays' seller.
Other major investors in the bank include BlackRock and Vanguard group.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "The bank now needs a reputation reboot for its investment arm, which had been the shining light during the dark days of the pandemic, when the sharp increase in trading helped offset the provisions for bad loans.
"An internal and external inquiry is now underway into the bond blunder, in addition to the ongoing FCA probe into former CEO Jes Staley’s relationship with disgraced financier Jeffrey Epstein. It’ll take some time for these clouds to lift, but the underlying performance of the business is positive, and the bank is well capitalised."
Elsewhere insurer Admiral Group Plc (LSE:ADM) has added 2.37% as analysts at Barclays moved from equal weight to overweight.
In the mid-cap index, Currys PLC (LSE:CURY) has climbed 4.79% on takeover talk.
9.50am: Royal Mail under pressure
Close behind Barclays PLC (LSE:BARC) in the list of FTSE 100 losers is Royal Mail PLC (LSE:RMG).
The group's shares are down 3.05% to 343.9p after analysts at Deutsche Bank moved their recommendation from buy to sell and slashed its target price from 680p to 285p.
However this has done nothing to disturb the progress of the blue chip index, which is now up 66.57 points or 0.89% at 7539.71.
9.13am: Share sale talk hits banking group
Shares in Barclays PLC (LSE:BARC) are falling on reports a major investor has sold a chunk of shares at a discount to the prevailing price, following Monday's news of the over-issuance of US bonds and a delay to its £1bn buyback programme.
They are currently down 4.96% at 152.52p, making it the biggest faller in the leading index.
Victoria Scholar, head of investment at interactive investor said, “Shares in Barclays have slumped around 5% after an unnamed top investor offloaded a roughly 3% stake in the company, at a 6% discount to Monday’s close in an off-market block trade. This follows news that Barclays is taking a £450mln loss after surpassing a US limit on structure product sales, which have been linked to the recent market volatility since the Ukraine war."
The bank has commissioned an independent review into the matter, and regulators are also conducting inquiries.
8.30am: Supermarket prices jump, sales fall
Grocery price inflation hit 5.2% in March, its highest level since April 2012, with consumers increasingly turning to own label products as costs rise.
Supermarket sales also fell by 6.3% over the 12 weeks to 20 March, according to the latest report from Kantar, as pandemic concerns eased and people felt more confident eating out rather than stocking up at home.
Sales are still up versus two years ago, though only by 0.7% as the comparison now includes the record buying seen before the first lockdown in March 2020.
Discounters Aldi and Lidl were the only two major groups to see a sales increase.
Fraser McKevitt, head of retail and consumer insight at Kantar, says: “It’s no surprise that sales are down over the latest period as consumers are now more confident eating out of the home again. As well as enjoying meals out with friends and families, people will have also been grabbing food and drink on the go from supermarkets while travelling or at work. Those sales aren’t included in these take-home figures, but they will be adding to the grocers’ overall performance.
“What we’re really starting to see is the switch from the pandemic being the dominant factor driving our shopping behaviour towards the growing impact of inflation, as the cost of living becomes the bigger issue on consumers’ minds.”
On prices, he said: "More and more we’re going to see consumers and retailers take action to manage the growing cost of grocery baskets. Consumers are increasingly turning to own label products, which are usually cheaper than branded alternatives. Own label sales are down in line with the wider market but the proportion of spending on them versus brands has grown to 50.6%, up from 49.9% this time last year.
“Meanwhile the grocers are also adapting their pricing strategies in response to the rising cost of goods. One trend we’re already tracking is the move away from selling products at ‘round pound’ prices. The percentage of packs sold at either £1, £2 or £3 has dropped significantly from 18.2% last year to 15.9% this March.”
On the sales front, Aldi and Lidl both rose by 6%.
Tesco PLC (LSE:TSCO) lost 5.3%, J Sainsbury PLC (LSE:SBRY) 7.5%, Asda 9.9% and Morrisons 11.5% during the 12-week period.
8.18am: Positive start for London shares
Leading shares have made a positive start, more than recovering Monday's late dip as oil prices fell.
Following a good performance from US and Asian markets and optimism about peace talks between Ukraine and Russia, the FTSE 100 is up 40.64 points or 0.54% at 7513.78.
Richard Hunter, head of markets at interactive investor, said: "The wave of guarded optimism on both Wall Street and Asia has washed through to UK shores in early trade, despite the ongoing travails which investors are facing. The boost in early exchanges continues the trend of the FTSE100 as a relative outperformer, and the index remains ahead by 2% in the year to date. Some weakness in sterling over the first quarter – with overseas earnings being a key factor among its constituents - has added to a generally positive cocktail for the index, with the elements of defensive stocks and exposure to commodity strength providing further pillars of support."
Meanwhile markets seem to have shrugged off a bigger than expected fall in German consumer confidence, with the GfK index coming in at-15.5 rather than the -14.6 forecast, as inflation concerns and war fears hit sentiment.
Naeem Aslam, chief market analyst at Avatrade, said: "Given that economic ties are on the verge of collapse between Russia and Germany, German businesses are worried that the country may get caught on the wrong end due to the US and Russia’s conflict. The sanctions imposed by Germany on Russia due to the US pressure could cost them dearly, and the current economic situation has yet to factor that in full."
Germany's Dax is up around 1.1% in early trading.
6.50am: Markets set to regain lost ground
The FTSE 100 is expected to start on the front foot on Tuesday after a late stumble in yesterday's session as oil prices retreated amid continuing Ukraine peace talks and rolling lockdowns in China.
London's gauge of blue-chip stocks has been called 40 points higher on the IG spread-betting platform, erasing the 10-point decline to 7,473.14 at the start of the week.
Overnight, Wall Street's tech stocks led the way higher as bond yields softened, with the Nasdaq index rising 1.3%, the S&P 500 up 0.7% and the Dow Jones nudged 0.2% higher.
"Peace negotiations between Ukraine and Russia will resume in Turkey today, but reports about a potential poisoning of previous peace talk participants leave some uncertainty," said analysts at Danske Bank.
According to a story in the FT, Russia claims it no longer wants Ukraine to be “denazified” and is even happy with it joining the EU – provided it hands over Crimea and the Donbas.
However, while Ukraine has said it is prepared to remain neutral, it has ruled out giving up any territory and called for any agreement to go to a referendum.
"So, a plank towards an off-ramp? Perhaps," said Michael Every at Rabobank. "Or it could be Russian 'Maskirovka' given the entire war effort has been predicated on the anti-Nazi line so far."
"One thing we can be sure of is that any negotiators with Russia will do their own catering given the last set who tried to talk peace, including oligarch Roman Abramovich, reportedly then suffered symptoms of chemical poisoning."
For UK investors there will be plenty of results to sift through, including housebuilder Bellway PLC (LSE:BWY) and drinks maker AG Barr PLC (LSE:BAG), along with supermarket data from Kantar.
6.50am: Early Markets - Asia / Australia
Stocks across Asia-Pacific rose on Tuesday after oil prices slumped more than 8% overnight on demand concerns arising from COVID-19 lockdowns in Shanghai.
Japan’s Nikkei 225 surged 0.92% and South Korea’s Kospi gained 0.33%.
The Shanghai Composite in China advanced 0.09% while Hong Kong’s Hang Seng index rose 0.84%.
Australia’s S&P/ASX200 lifted 0.7% to close at 7,464 points and briefly touched its highest since early January, supported by gains for the big banks and the technology sector.