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London open: Stocks edge up ahead of Ukraine peace talks
London stocks edged higher in early trade on Monday as investors eyed the next round of peace talks between Russia and Ukraine in Turkey.
At 0840 GMT, the FTSE 100 was up 0.4% at 7,510.57.
Victoria Scholar, head of investment at Interactive Investor, said: “European markets have started the week on a positive footing clinging to hopes that a peace deal between Ukraine and Russia could be in sight.
“The FTSE 100 is lagging behind the wider region dragged down by Rolls-Royce and Barclays. This week’s positivity marks a reversal from last week when the pan-European STOXX 600 logged its first weekly decline in three.”
In equity markets, NatWest was up after saying it was buying back a 4.01% stake in the bank from the UK government for £1.2bn, taking the British taxpayers’ holding to below 50% for the first time since the financial crash of 2008. The bank said it would cancel the shares once repurchased. NatWest was bailed out by the taxpayer to the tune of £45bn as the global financial system faced meltdown after predatory lending and excessive risk-taking by the sector.
On the downside, aerospace and defence giant Rolls-Royce slid, having surged late on Friday after markets blog Betaville said it might be involved in a “significant corporate transaction, such as a merger or even a takeover offer for the business itself”. According to Betaville, an unknown suitor may be in the early stages of weighing a deal “for or with Rolls-Royce”.
Scholar said: “With nothing confirmed so far, the shares are losing steam this morning. However they are still trading significantly above Thursday’s close, suggesting there is still some M&A premium in the price with investors pinning their hopes on an approach.”
Barclays was under the cosh following a report the bank expects to take a £450m charge and will delay a share buyback until the second quarter after issuing almost double as many US structured notes and exchange traded notes as it had registered for sale.
Outside the FTSE 350, Ted Baker lost ground after saying it had rejected two unsolicited non-binding proposal from private equity firm Sycamore. The fashion retailer said Sycamore made a 130p a share cash proposal on 18 March and another at 137.5p a share on 22 March.
Top 10 FTSE 100 Risers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Easyjet Plc | +4.22% | +21.80 | 538.20 |
| 2 |  |
Tui Ag | +3.21% | +7.20 | 231.50 |
| 3 |  |
International Consolidated Airlines Group S.a. | +2.65% | +3.64 | 140.96 |
| 4 |  |
Direct Line Insurance Group Plc | +2.63% | +7.20 | 280.80 |
| 5 |  |
Bhp Group Limited | +2.11% | +60.00 | 2,899.50 |
| 6 |  |
Aviva Plc | +2.10% | +9.20 | 447.00 |
| 7 |  |
Whitbread Plc | +2.10% | +58.00 | 2,823.00 |
| 8 |  |
Wpp Plc | +1.97% | +20.50 | 1,060.00 |
| 9 |  |
Burberry Group Plc | +1.95% | +32.50 | 1,700.50 |
| 10 |  |
Standard Chartered Plc | +1.94% | +9.80 | 514.40 |
Top 10 FTSE 100 Fallers
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Rolls-royce Holdings Plc | -11.10% | -12.23 | 97.91 |
| 2 |  |
Barclays Plc | -3.65% | -6.10 | 161.20 |
| 3 |  |
Bae Systems Plc | -1.75% | -13.20 | 741.80 |
| 4 |  |
Spirax-sarco Engineering Plc | -1.26% | -155.00 | 12,105.00 |
| 5 |  |
Antofagasta Plc | -1.10% | -19.00 | 1,716.00 |
| 6 |  |
Smurfit Kappa Group Plc | -1.00% | -34.00 | 3,355.00 |
| 7 |  |
Ferguson Plc | -1.00% | -105.00 | 10,370.00 |
| 8 |  |
Anglo American Plc | -0.90% | -36.00 | 3,943.00 |
| 9 |  |
Centrica Plc | -0.88% | -0.74 | 83.76 |
| 10 |  |
Informa Plc | -0.74% | -4.40 | 589.60 |
Europe open: Shares up as Ukraine war, Shanghai Covid lockdown in focus
European shares edged ahead at the start of the week as investors eyed a falling oil price and the potential fallout from a new lockdown in Shanghai as China battled its latest Covid outbreak.
The pan-European Stoxx 600 index was up 0.6% with all major regional bourses also higher. Asia markets were largely higher apart from Japan, which fell 0.73%.
Investors were also monitoring events in Ukraine as President Volodymyr Zelenskyy called for “peace without delay” as Russian forces continued to shell cities as part of its unprovoked invasion of its neighbour.
Oil prices fell as officials in Shanghai said China’s largest city with a population of 25 million would go into lockdown after a surge of Covid Omicron cases, stoking fears of reduced energy demand.
“European markets have started the week on a positive footing clinging to hopes that a peace deal between Ukraine and Russia could be in sight,” said Victoria Scholar, head of investment at Interactive Investor.
In equity news, shares in aircraft engine maker Rolls-Royce slumped having surged late on Friday after markets blog Betaville said it might be involved in a “significant corporate transaction, such as a merger or even a takeover offer for the business itself”. According to Betaville, an unknown suitor may be in the early stages of weighing a deal “for or with Rolls-Royce”.
Interactive’s Scholar said that the shares had lost momentum “with nothing confirmed so far”.
“However they are still trading significantly above Thursday’s close, suggesting there is still some M&A premium in the price with investors pinning their hopes on an approach.”
Orpea shares were down as the French government said it planned to file a criminal complaint against the care home company after a month and a half-long investigation into the group’s management and financial practices.
Shares in UK bank NatWest were up after the company said it was buying back a 4.91% stake in the bank from the UK government for £1.2bn, taking the British taxpayers’ holding to below 50% for the first time since the financial crash of 2008.
Barclays shares were lower on news the bank expects to take a £450m charge and will delay a share buyback until the second quarter after issuing almost double as many US structured notes and exchange traded notes as it had registered for sale.
US close: Stocks mixed following EU-US energy deal
Wall Street stocks put on a mixed performance on Friday after the European Union struck a deal with the US in an effort to lower its Russian energy usage.
At the close, the Dow Jones Industrial Average was up 0.44% at 34,861.24, while the S&P 500 was 0.51% firmer at 4,543.06 and the Nasdaq Composite saw out the session 0.16% weaker at 14,169.03.
The Dow closed 153.30 points higher on Friday, building upon solid gains recorded in the previous session.
In focus on Friday was news that the US and EU had reached a deal to increase exports of liquefied natural gas to the block and cut its dependence on Russian energy.
President Joe Biden and his European Commission counterpart Ursula von der Leyen said the deal would see LNG shipments to Europe rise by 15.0bn cubic metres in 2022.
“This will replace the LNG supply we currently receive from Russia, and looking ahead, the United States and Europe will ensure stable demand and supply for an additional at least 50 billion cubic metres of US LNG until 2030,” von der Leyen said, noting that amount would replace one-third of Russian gas imports. “We are right on track now to diversify away from Russian gas,” she said.
Also in focus, the yield on the benchmark 10-year Treasury note eased off from a fresh multi-year high to 2.467% by the end of trading.
On the macro front, the University of Michigan‘s consumer sentiment was revised slightly lower to 59.4 in March, down from a preliminary of 59.7 for the lowest reading since August 2011. The subindexes for both current conditions and expectations were both revised down to 67.2 from 67.8 and 54.3 from 54.4, respectively.
Elsewhere, US existing homes sales plunged 5.4% year-on-year in February, according to the National Association of Realtors, marking a nine-month drop in transactions
No major corporate earnings were slated for release on Friday.
