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(Alliance News) - Equities look set for another tough week, with stocks in London called sharply lower on Monday morning, as Russia intensified its attack on neighbouring Ukraine and China trimmed its growth outlook.
Meanwhile, oil prices surged toward USD140 a barrel on concern the next set of Western sanctions will target Russian oil.
IG futures indicate the FTSE 100 index will open down 108.94 points, or 1.6%, at 6,878.20 on Monday. The index closed down 251.71 points, or 3.5%, at 6,987.14 on Friday. The FTSE 100 lost 6.7% last week and closed below the 7,000 point threshold for the first time since October.
In early UK corporate news, Spectris has walked away from its takeover bid for Oxford Instruments, while Clarkson upped its annual dividend after returning to profit.
Russian forces pummelled Ukrainian cities from the air, land and sea on Monday, with warnings they were preparing for an assault on the capital Kyiv, as terrified civilians failed for a second day to escape besieged Mariupol.
The relentless fire has pushed more than 1.5 million people across Ukraine's borders as refugees, though many others are displaced internally or trapped in cities being reduced to rubble by Russian bombardment.
Brent oil was quoted at USD129.10 a barrel on Monday morning, surging dramatically from USD114.52 late Friday and having neared a 14-year high of USD140.
SPI Asset Management's Stephen Innes said: "The rally was triggered by reports that the US Congress is pushing for an embargo of oil imports from Russia.
"The market is pricing out Russian oil supply - through a US and EU embargo - while pricing in Iran supply. But the loss of Russian oil exceeds the upside from Iran. Why it's difficult to calculate a top is because Russian oil will find its way to the Chinese market lessening demand from the Middle East while simultaneously factoring in demand destruction is a wild card at best. Still, you don't cut off the world's second-largest oil supplier and expect speculators and buyers to sit idle."
Iran and the UN nuclear watchdog said Saturday they had agreed an approach for resolving issues crucial to reviving the country's 2015 nuclear accord with world powers – but new Russian demands may delay a deal. The announcement came shortly before Russia said it would seek guarantees from the US before it backs the deal, potentially scuppering hopes an agreement - which would release oil exports from Iran - could be wrapped up quickly.
Gold stood at USD1,982.80 an ounce early Monday, up sharply from USD1,961.27 late Friday.
In London, Spectris has called off talks with fellow FTSE 250 constituent Oxford Instruments over a potential takeover, blaming the market uncertainty caused by Russia's invasion of Ukraine.
Oxford Instruments confirmed at the end of February it had received a takeover offer proposal from Spectris worth about GBP1.8 billion. Oxford Instruments, which makes scientific tools for research and industry, said the final offer on February 28 followed a "series of earlier proposals" from Spectris.
"Oxford Instruments is a quality company and the strategic and financial rationale for a combination of our businesses is highly compelling," Spectris Chief Executive Andrew Heath said on Monday.
"However, with the invasion of Ukraine, the world has changed since our proposed offer was made regarding a combination of our businesses, bringing a high degree of uncertainty to the economic outlook around the world. While we believe this combination is a great opportunity for both companies, the timing is no longer right and we have brought our discussions to a close."
Oxford noted the proposal was "unsolicited" and still believes it has a "clear and compelling" strategy to achieve growth on its own.
Shipping services firm Clarkson swung to a profit in 2021, and upped its shareholder payout, following a recovery in shipping markets.
For 2021, it recorded a pretax profit of GBP69.1 million versus a GBP16.4 million loss in 2020.
Revenue increased 24% to GBP443.3 million from GBP358.2 million.
Clarkson upped its annual dividend to 84 pence from 79p a year prior.
Chief Executive Andi Case said: "We are positive about the future of the shipping industry. The outlook for Clarksons remains strong and we believe the business will continue to benefit from its market-leading position."
Clarkson ended 2021 with a forward order book of USD165 million, up from USD116 million at the same point a year earlier.
Airtel Africa said it has secured a 10-year temporary licence in its largest market. The company's Kenyan subsidiary received approval from regulators for a replacement license with a ten-year frequency licence for 2x10 megahertz of spectrum in the 2,100 MHz band.
"This USD30 million investment reflects our continued confidence in the tremendous opportunity inherent in the Kenya market," the company said.
CareTech Holdings could soon be facing a takeover after shareholder Sheikh Holdings Group, the family office of Haroon and Farouq Sheikh, confirmed press speculation that it is in the "early stages of forming a consortium" to potentially make a bid to buy CareTech.
CareTech has not yet been approached, it noted.
UK house prices rose at fastest the annual pace since 2007 to reach new record high, the Halifax house price index showed Monday.
Monthly house price growth was 0.5% in February, with prices rising 11% annually.
"This was an eighth successive month of house price growth, as the resilience which has typified the market throughout the pandemic shows little sign of easing. Year-on-year prices grew by 10.8%, the fastest pace of annual growth since June 2007, pushing the average house price up to another record high of GBP278,123," Halifax Managing Director Russell Galley said.
"Two years on from the start of the pandemic, average property values have now risen by GBP38,709, or 16%, since February 2020. Over the last 12 months alone house prices have gained on average GBP27,215. This is the biggest one-year cash rise recorded in over 39 years of index history."
In the US on Friday, Wall Street ended lower, as a strong US jobs report failed to perk up equities.
The Dow Jones Industrial Average closed down 0.5% on Friday. The S&P 500 closed down 0.8%. The Nasdaq Composite closed down or 1.7%.
In Asia on Monday, the Japanese Nikkei 225 index closed down 2.9%. In China, the Shanghai Composite ended 2.2% lower, while the Hang Seng index in Hong Kong was down 3.3% in late trade. The S&P/ASX 200 in Sydney closed down 1.0%.
China said it has cut its economic growth target for next year to "about 5.5%", but it seeks to increase military spending by 7.1% as the annual People's Congress kicked off in Beijing on Saturday.
In a speech at the start of the annual session of the People's Congress in the Great Hall of the People in Beijing, Prime Minister Li Keqiang prepared the nation for a difficult year economically.
The prime minister justified the downsized growth target for the world's second-largest economy with pressure from shrinking demand, disrupted supply chains and weakening expectations.
The global economic recovery is also lacking impetus, he added. Achieving even the lower goal would require hard efforts, Li said in his report to the nearly 3,000 delegates. Last year, growth of "more than 6%" had been projected.
The pound was quoted at USD1.3224 early Monday, firm on USD1.3215 at the London equities close Friday.
The euro was priced at USD1.0885, down from USD1.0915. Against the yen, the dollar was trading at JPY115.09, up against JPY114.76.
By Paul McGowan; paulmcgowan@alliancenews.com
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