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ADVFN Morning London Market Report: Wednesday 2 March 2022

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London open: Stocks gain as housebuilders rally; oil prices surge


London stocks rose in early trade on Wednesday despite ongoing concerns about the Ukraine crisis, with housebuilders on the front foot after solid results from Persimmon.

At 0900 GMT, the FTSE 100 was up 0.7% at 7,377.86, while oil prices surged above $110 a barrel as the war in Ukraine threatens supply and ahead of an Opec meeting later in the day.

Neil Wilson, chief market analyst at, said: “Russia is starting a new phase of the campaign, bringing a lot more force to bear and shelling civilian areas. This poses the risk that the West will encounter growing pressure to sanction Russian oil and gas exports, with all that would entail.

Centrica said it is urgently seeking to end its natural gas supply agreement with Gazprom – self-sanctioning already well underway. Exxon Mobil followed Shell and BP to say it will exit Russia, leaving $4bn in assets in doubt. We are seeing this with the container ships too, and banks. Moreover oil traders are already starting to try to secure alternatives.

“We should note that rising oil prices are a windfall for the Kremlin and Russia’s terms of trade – the ratio of its export to import prices – is at its highest since oil prices fell in 2014. This is one of the reasons why Western governments might play this card – the cognitive dissonance of squeezing Russia on all fronts with sanctions while still funding their war machine by buying oil and gas may not survive for long. The other reason will be mounting pressure from their electorates as bombing on civilians increases, leading to more deaths and distressing scenes for the TV screens.”

In equity markets, Russian steelmaker Evraz and Anglo-Russian precious metals miner Polymetal were both trading up following heavy losses on Tuesday. Polymetal was also in focus after the release of its full-year results.

Oil giants Shell and BP gushed higher amid surging oil prices, while Hiscox advanced after the insurer said it swung to a full-year profit, with gross written premiums boosted by continued positive rate momentum in all three divisions and strong customer growth in the retail segment.

Persimmon was a high riser after the housebuilder said it remained confident for the current year despite rising interest rates, as strong demand boosted annual sales. Peers followed suit, with Taylor Wimpey and Barratt also up.

Aviva gained even as the insurer reported a 28% fall in annual profits, reflecting lower operating earnings from discontinued operations and also announced the £385m acquisition of Succession Wealth.

Gold miner Petropavlosk, which has operations in Russia, was the strongest performer on the FTSE 250 after sharp falls on Tuesday, while Weir Group rallied on well-received results.

On the downside, Coco-Cola HBC slid, with traders pointing to its significant exposure to Russia.

Airlines were under the cosh after the US banned Russian flights from its airspace, with BA and Iberia owner IAG and budget airlines Wizz Air and easyJet all sharply lower.

Elsewhere, Royal Mail was hit by a downgrade to ‘sell’ from ‘hold’ at Liberum, which pointed to a margin squeeze risk from pay inflation. The broker also cut its price target on the shares to 355p from 470p.


Top 10 FTSE 100 Risers

# Name Change Pct Change Cur Price
1 Evraz Plc +21.63% +22.25 125.10
2 Shell Plc +4.74% +92.50 2,043.50
3 Persimmon Plc +4.44% +103.00 2,425.00
4 Rio Tinto Plc +4.31% +255.00 6,174.00
5 Bp Plc +4.03% +14.40 371.50
6 Fresnillo Plc +3.34% +24.20 749.00
7 Bhp Group Limited +3.19% +81.50 2,633.00
8 Intertek Group Plc +3.01% +160.00 5,478.00
9 Antofagasta Plc +2.93% +46.00 1,617.50
10 Experian Plc +2.54% +74.00 2,982.00


Top 10 FTSE 100 Fallers

# Name Change Pct Change Cur Price
1 Coca-cola Hbc Ag -8.69% -154.00 1,618.50
2 Tui Ag -4.93% -10.80 208.30
3 Associated British Foods Plc -3.81% -68.50 1,730.00
4 Easyjet Plc -3.70% -20.20 526.00
5 Micro Focus International Plc -2.96% -11.00 360.60
6 Bt Group Plc -2.81% -5.15 178.40
7 Smurfit Kappa Group Plc -2.60% -91.00 3,407.00
8 International Consolidated Airlines Group S.a. -2.43% -3.30 132.78
9 Whitbread Plc -2.30% -62.00 2,639.00
10 Rolls-royce Holdings Plc -1.90% -1.75 90.25


Europe open: Shares slip again as oil prices soar on supply fears

European shares fluctuated at the opening on Wednesday as oil prices surged on fears of supply disruption as sanctions against Russia over its invasion of Ukraine started to hit home.

The pan-European Stoxx 600 index was 0.7% lower in early deals as losses continued for a third straight day. The benchmark is down 9% so far this year. German and French bourses were lower, while the UK’s FTSE 100 bucked the trend and US futures were higher.

Russian forces continued to batter Kharkiv, Ukraine’s second largest city, and were set to encircle the capital Kyiv. A growing number of companies are cutting ties with an increasingly isolated Moscow, with AirbusFordGoogle, and, belatedly, Apple joining the list.

Crude oil prices surged by almost 7%, with Brent crude soaring past $110 per barrel for the first time in eight years. U.S. crude futures also saw big gains, rising around 6.6% to $110.29 per barrel.

The rise comes despite the International Energy Agency saying it would release 60 million barrels of oil from global reserves to ease supply constraints.

In equity news, Ericsson slumped 11.5% after the Swedish telecom gear maker said it had been informed that disclosures it made to the US Department of Justice about an internal investigation into conduct in Iraq were insufficient.

British insurer Hiscox gained more than 7% in early trade to lead the Stoxx 600 after swinging to a full-year pre-tax profit for 2021 and issuing a positive outlook.

Finland’s Nokian Tyres continued its slide, down another 15%, as investors continued to fret about its Russian exposure.

Just Eat Takeaway gained more than 7% as annual revenues jumped by more than a third.

UK house builder Persimmon was higher as the company issued an upbeat set of results and said it remained confident for the current year, despite rising interest rates, after strong demand boosted annual sales.


US close: Stocks end session sharply lower as Russian convoys move toward Kyiv

Wall Street stocks ended the session firmly in the red on Tuesday as market participants continued to monitor the ongoing conflict between Russia and Ukraine after satellite cameras allegedly captured images of a convoy of Russian military vehicles en route to the Ukrainian capital of Kyiv.

At the close, the Dow Jones Industrial Average was down 1.76%% at 33,294.95, while the S&P 500 was 1.55% weaker at 4,306.26 and the Nasdaq Composite saw out the session 1.59% firmer at 13,532.46.

The Dow closed 597.65 points lower on Tuesday, extending losses recorded in the previous session as Russian and Ukraine officials arrived at the border to discuss potentially calling a stop to hostilities between the two sides.

Although Russian and Ukrainian emissaries wrapped up a critical round of talks on Monday, a roughly 65.0km long convoy of Russian military vehicles was caught by US firm Maxar Technologies’ satellite heading toward Kyiv, indicating that Moscow may actually be upping the ante in the invasion of its western neighbour.

The image appears to show a convoy of Russian armoured tanks and trucks that stretches from Pybirsk to the Antonov airport, the site of fighting last week between Russian and Ukrainian forces. Official sources have not yet confirmed the existence of the convoy.

On the macro front, the seasonally adjusted IHS Markit US manufacturing purchasing managers’ index posted 57.3 in February, up from 55.5 in January and only slightly lower than the earlier released flash estimate of 57.5. While the headline figure was below peaks seen in 2021, it signalled a stronger upturn in the health of the manufacturing sector, with sharper output and new order expansions both contributing to overall growth.

Elsewhere, the Institute for Supply Management’s manufacturing PMI rose for a second straight month to 58.6 in February, up from 57.6 in January and ahead of market forecasts of 58, as Covid-19 infections eased off.

In the corporate space, department store operator Kohl’s issued better-than-expected guidance early on Tuesday as margins looked set to withstand supply chain disruptions, while big-box retailer Target said same-store fourth-quarter sales had grown 8.9% despite supply chain pressures and said it expects to see revenue growth in the mid-single-digits and adjusted earnings per share in the high single-digits from fiscal 2023 onwards.

Fast food giant Wendys beat on profits, revenue and same store sales, and also provided some upbeat full-year guidance, while Domino’s Pizza shares headed south after the company posted weak fourth-quarter results and announced the retirement of its chief executive.


Wednesday newspaper round-up: Apple, Russian banks, OneWeb, FCA

The government’s long-delayed register of offshore owners of UK property will fail to tackle corruption unless multiple loopholes in the draft legislation are closed, experts have warned. On Monday, the government announced it would introduce a “register of overseas entities” requiring anonymous foreign owners of UK property to publicly declare their true identities as part of its draft Economic Crime (Transparency and Enforcement) bill. – Guardian

Apple has said it will pause all product sales in Russia, heeding requests from Ukrainian officials to take action against the country in response to its invasion. “We are deeply concerned about the Russian invasion of Ukraine and stand with all of the people who are suffering as a result of the violence,” Apple said in a statement on Tuesday. – Guardian

Vladimir Putin has signed a decree banning Russians from leaving the country with more than $10,000 (£7,500) in foreign currency as fears grow that the Russian financial system is on the brink of collapse. State media reported on Tuesday night that the export of foreign currency cash and foreign currency instruments over $10,000 will be banned starting on Wednesday and the Kremlin’s press office said the move is an attempt to “ensure Russia’s financial stability”. – Telegraph

The taxpayer-backed broadband company OneWeb is preparing to launch satellites into space using Russian rockets days after Vladimir Putin’s invasion of Ukraine.OneWeb, which was bailed out by the Government two years ago, has paid for 36 satellites to be sent into orbit from the Russian-owned Baikonur Cosmodrome in Kazakhstan. – Telegraph

The chief executive of the Financial Conduct Authority has moved to avert a potential strike by offering base pay rises of up to 20 per cent to his lowest-paid employees plus a cash Easter sweetener of £1,000 or more to all staff. Nikhil Rathi, who runs the main City regulator and has been trying to ban cash bonuses, said most staff members would get a pay rise of at least 9 per cent over two years, with the average pay packet going up by 12 per cent. – The Times


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