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(Alliance News) - Stocks in London ended higher on Tuesday even as US President Joe Biden announced the ban on US imports of Russian oil in his most far-reaching action yet to punish Moscow for invading Ukraine.
In addition, the UK also announced that it would phase out Russian oil imports by the end of this year.
Both announcements were made around the time of the London market close.
The FTSE 100 index closed marginally higher, up 4.63 points, or 0.1%, at 6,964.11.
The mid-cap FTSE 250 index closed up 47.84 points, or 0.3%, at 19,217.62. The AIM All-Share index closed up 3.69 points, or 0.4%, at 961.84.
The Cboe UK 100 index closed down 0.1% at 694.50. The Cboe 250 closed up 0.6% at 16,923.71, and the Cboe Small Companies finished up 1.5% at 14,142.67.
In mainland Europe, the CAC 40 in Paris ended up 0.3% and the DAX 40 in Frankfurt finished marginally lower.
"The day has seen markets repeatedly attempt to stabilise, with some buying developing despite the news of UK and US sanctions on Russian oil exports. While there seems little prospect that the rest of Europe will follow suit, the move has brought inflation and supply concerns back to the forefront. Markets look to be in more of a consolidation mode than was the case yesterday, but no one as yet seems to be in any hurry to buy the dip," said IG Group's Chris Beauchamp.
Stocks in New York were lower at the London equities close. The DJIA was down 0.3%, the S&P 500 index down 0.6% and the Nasdaq Composite down 0.7%.
"We're banning all imports of Russian oil and gas and energy. That means Russian oil will no longer be acceptable at US ports and the American people will deal another powerful blow to (President Vladimir) Putin," Biden said in an address from the White House, adding that the decision was taken "in close consultation" with allies.
Brent oil was quoted at USD132.65 a barrel at the equities close, up sharply from USD123.22 at the close Monday.
Oil majors BP and Shell closed up 5.1% and 3.0% respectively, tracking spot oil prices higher.
In the FTSE 100, M&G ended the best performer, up 15%, after the investment manager announced a GBP500 million buyback and achieved cost savings a year ahead of schedule.
M&G ended 2021 with GBP370.0 billion in assets under management & administration, up 0.8% from GBP367.2 billion at the same point a year prior.
Turning to returns, M&G declared total dividends of 18.3 pence in 2021, up marginally from 18.2p in 2020. Further, the London-based firm plans to return GBP500 million to shareholders through a share buyback. This will start shortly.
In addition to meeting the GBP1.8 billion capital return aim, M&G also has delivered annual shareholder cost savings of GBP145 million. The cost saving target was delivered a year earlier than planned, it noted.
Fresnillo closed up 9.3% after the Mexican precious metal miner said it was able to produce silver just below guidance in 2021, but gold production was ahead.
That, together with higher prices, resulted in a rise in annual revenue. For 2021, pretax profit improved 11% to USD611.5 million from USD551.3 million, as revenue grew to USD2.70 billion from USD2.43 billion. Silver production was flat on the year before at 53,095 ounces, while gold production slipped 2.4% to 751,203 ounces.
Fresnillo declared total dividends for 2021 of 33.9 US cents, up 31% from 25.8 cents in 2020.
Gold stood at USD2,056.80 an ounce at the London equities close, advancing from USD1,978.34 late Monday. Midcap gold miners Petropavlovsk and Hochschild Mining ended the best performers, up 20% and 19% respectively.
In the FTSE 250, IWG closed up 9.7%. The office provider said it plans to merge some of its digital and technology assets with The Instant Group, before demerging the entity through a stock market listing by the end of next year.
Explaining the merger, Luxembourg-based IWG said it will invest GBP270 million to acquire the shares of selling shareholders and provide capital for growth, with The Instant Group management investing a further GBP50 million into the merger.
The Instant Group is a flexible workspace platform and services provider which operates in North America, Europe and Asia. By the end of 2023, the merged company will be spun out via a listing on US or UK markets.
Separately, IWG reported a narrowed loss in 2021 of GBP259.4 million, trimmed from 2020's loss of GBP613.3 million.
Conversely, Greggs lost 3.4% even as the bakery chain lifted its annual dividend, declared a special payout.
In the year that ended January 1, Greggs swung to a pretax profit of GBP145.6 million from a GBP13.7 million loss the year before. Revenue surged 52% to GBP1.23 billion from GBP811.3 million in 2020 and was up 5.3% from 2019's revenue of GBP1.17 billion, before the onset of the pandemic.
Like-for-like sales from company-managed stores were 3.3% below pre-virus levels. The measure does not include franchises.
Greggs declared a total dividend of 57.0p, after withholding its shareholder payout in 2020. In addition, it declared a 40.0p special payout, to be released in April.
Meanwhile, as a growing list of US multinational businesses, from Apple to Levi's, suspend activities in Russia, some companies have chosen to stay in the country despite the risks to their reputation.
But following last month's invasion of Ukraine, firms such as Pepsi and McDonald's face mounting pressure. Calls for repercussions for the recalcitrant are appearing on social media under hashtags such as #BoycottMcDonalds and #BoycottPepsi.
Late Monday, Yum Brands announced it "has suspended all investment and restaurant development in Russia" and Estee Lauder "decided to suspend all commercial activity in Russia". Starbucks and Coca-Cola have also been criticised on social media for failing to speak out about the attacks and continuing to operate in the country.
Sterling was in the red amid fears the ongoing conflict between Russia and Ukraine will deal a signifiant blow to the domestic economy.
The pound was quoted at USD1.3110 at the London equities close, down from USD1.3128 at the close Monday.
Even though the UK economy has little direct exposure to Russia and will be relatively insulated from sanctioning of Russian assets, rising commodity prices could filter though across Europe. As such, concerns have mounted that the price of many everyday items ranging from food to petrol and heating will rise and hurt consumers with inflation already at rampant levels.
The crisis in Ukraine has also turned up the heat on UK Chancellor of the Exchequer Rishi Sunak to reverse the planned national insurance hike in April, amid fears the domestic economy will plunge into "stagflation".
Stagflation occurs when inflation rises while economic growth slows.
"The British pound was down to a 16-month low at 1.3080 in the morning, having lost 2% last Thursday. The pressure on the British currency looks to be developing capital outflows from Europe on speculation that reduced energy and materials supplies from Russia will prove to be a shock to the region's economy in the near term," said Alex Kuptsikevich, senior market analyst at FxPro.
The euro was priced at USD1.0890 at the European equities close, up from USD1.0860. Against the yen, the dollar was trading at JPY115.62, up from JPY115.45.
The economic events calendar on Wednesday has China inflation figures overnight.
The UK corporate calendar on Wednesday has annual results from gambling firm 888 Holdings and from insurers Prudential and Legal & General Group.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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