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(Alliance News) - Stock prices in London opened sharply lower on Monday as the prospect of a war in Europe hit already fragile markets at the start of the week.
Just a handful of blue-chip stocks in London were higher in early dealings. Shares in steel maker Evraz, which largely operates in Russia, tanked.
Markets, already at a low ebb following a hot US inflation report and as central banks move closer to normalising monetary policy, took a further hit from geopolitical tensions.
Washington reaffirmed its warning Sunday that Russia could invade Ukraine at any moment, and German Chancellor Olaf Scholz prepared to visit both countries in a bid to head off a crisis that Berlin said had reached a "critical" point.
The FTSE 100 index was down 148.28 points, or 1.9%, at 7,512.74 early Monday. The mid-cap FTSE 250 index was down 493.35 points, or 2.2%, at 21,555.36. The AIM All-Share index was down 14.38 points, or 1.3%, at 1,069.89.
The Cboe UK 100 index was down 1.9% at 746.05. The Cboe 250 was down 2.2% at 19,322.69, and the Cboe Small Companies down 0.8% at 15,558.73.
In mainland Europe, the CAC 40 in Paris plunged 3.3%, while the DAX 40 in Frankfurt was down 2.7% early Monday.
Not one CAC or DAX stock was higher in early dealings. Gold miner Fresnillo at least offered some respite in London.
Western countries are winding down their diplomatic missions and urging their citizens to leave Ukraine immediately after a frantic week of diplomacy failed to calm one of the most explosive standoffs since the Cold War.
US national security advisor Jake Sullivan issued a grim assessment that an invasion that could begin "any day now" would likely start with "a significant barrage of missiles and bomb attacks".
Western leaders are pushing back against Putin's demands that the US-led NATO alliance withdraw from eastern Europe and never expand into Ukraine.
But Putin is dismissing calls by Biden and others to pull back Russian forces from Ukraine's frontiers.
"Investors have been wrong-footed once more as simmering geopolitical tensions and the reverberations of a high US inflation print weigh on sentiment," Interactive Investor analyst Richard Hunter commented.
"With the situation between Russian and Ukraine reportedly worsening with the increasing possibility of an invasion, diplomatic solutions thus far have had little impact. In economic terms, while any such invasion would be most acutely felt in Europe, there would likely be wider implications such as the possibility of supply chain restrictions and a further boost to the oil price on lessened supply."
Oil prices got a boost. A barrel of Brent fetched USD94.50 early Monday, up from USD93.16 late Friday. Brent reached an intraday high of USD96.05 a barrel, its best level since October 2014.
Asian equities struggled on Monday. The Nikkei 225 in Tokyo ended 2.2% lower, the Shanghai Composite ended down 1.0%, and the Hang Seng in Hong Kong closed down 1.4%. The S&P/ASX 200 in Sydney, however, advanced 0.2%.
The pound was quoted at USD1.3513 early Monday, down from USD1.3601 on Friday. The euro fetched USD1.1323, down from USD1.1406. Against the yen, the buck fell to JPY115.21 from JPY115.89.
Safe haven asset gold was quoted at USD1,857.06 an ounce early Monday, up from USD1,834.21 on Friday.
On the London Stock Exchange, gold miner Fresnillo was one of just three stocks in the green, up 2.2%.
Steel maker Evraz dropped a chunky 36%.
Elsewhere in the FTSE 100, athleisure retailer JD Sports lost 3.1%.
JD Sports and Footasylum have been fined almost GBP5 million by a UK watchdog for breaching rules related to a blocked merger of the duo.
An order by the Competition & Markets Authority blocked the two from exchanging "commercially sensitive information" without prior consent.
"Importantly, the order required that JD Sports and Footasylum put in place robust measures to prevent such breaches and ensure compliance with the order. Upon review, the CMA found that both companies had severely deficient safeguards in place - so much so that they created an environment where information exchanges were almost inevitable," the CMA said.
The regulator explained that two meetings between JD Sports Chief Executive Peter Cowgill and Barry Bown, his counterpart at Footasylum, took place last summer.
The CMA said that during the meeting, the duo discussed Footasylum's issues with stock allocations from key brands, the company's financial performance and several of its contract negotiations.
JD Sports on Monday noted it received a GBP4.3 million penalty. It said that a number of the CMA's conclusions "are either incorrect or have been presented in a misleading manner through the use of inflammatory language".
"In particular, JD notes that the CMA are suggesting, for the first time, that phone records have been deleted and, whilst JD accepts that some phone records were not available, it absolutely refutes any allegation that this was due to records being deliberately deleted," the company added.
Elsewhere in London, travel stocks were weaker. Budget airline Wizz Air fell 11%, cruise ship firm Carnival lost 7.8% and On The Beach dropped 5.3%.
Also hit by the threat of war was JPMorgan Russian Securities, a Russia-focused equity fund. The stock was down 4.3%.
By Eric Cunha; ericcunha@alliancenews.com
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