Hardide Share News (HDD)

LONDON (Alliance News) - Stocks have tumbled across the world, while gold and oil prices have jumped sharply, after Russia moved over the weekend to take control of the Crimea, prompting fears that Ukraine could end up going to war with its bigger neighbour.

The oil price has hit a 2014 high, the gold price is at its highest since last October, while stocks are down everywhere, with the FTSE 100 down 1.6% in London. Only 14 stocks are higher across the entire FTSE 350.

Russian Foreign Minister Sergei Lavrov has defended his country's military intervention in the peninsula, saying it is to protect the region's Russian minority against extremist Ukrainians and to safeguard human rights.

"This is a question of defending our citizens and compatriots, and ensuring human rights, especially the right to life," Lavrov told the UN human rights council in Geneva, while drawing parallels between Ukrainian activists and rebels in Syria.

"It is gravely important to disassociate ourselves from extremists who seek illegally to gain control over the situation, nurturing violence and open terror," he said.

The Russian military took "complete operational control" of Crimea on Sunday, according to a senior US official, who said the military presence included 6,000 airborne and naval forces, with
reinforcements on the way.

Lavrov's comments came as the EU's foreign ministers gathered in Brussels for emergency talks expected to focus on a condemnation of Moscow's actions in Ukraine and demands that Russian forces withdraw from Crimea, according to EU diplomats.

Seven of the world's most industrialized nations issued a joint condemnation of Russian actions in Crimea, saying they would stop their involvement in preparations for a planned G8 summit in June in Sochi.

"We, the leaders of Canada, France, Germany, Italy, Japan, the UK and the US and the President of the European Council and President of the European Commission, join together today to condemn the Russian Federation's clear violation of the sovereignty and territorial integrity of Ukraine," the G7 statement, released by the White House late Sunday, read.

Russia had to act to stabilize its own markets after shares in Moscow plummeted and the ruble plummeted to record lows against the US dollar. Russia's central bank raised its key interest rate unexpectedly by a massive 150 basis points to 7.00% from 5.50%, citing rising risks to inflation and financial stability.

"The decision is aimed at preventing the risks for inflation and financial stability arising from the recent increase in financial market volatility," the bank said in a statement.

Ukraine has ordered the full mobilisation of its military, while Russia has vowed its troops will remain until the political situation has been "normalised".

"Markets are on tenterhooks over the situation in Ukraine and Crimea," said Commerzbank analyst Rainer Guntermann.

Brent Oil has jumped more than two dollars to a new 2014 high of USD111.38 per barrel and continues to trade close to that level. Gold trades at its highest level in since late October 2013, peaking at USD1,350.01 per ounce.

Russia is the world's largest oil producer, according to International Energy Agency, exporting over five million barrels per day to Europe alone. "It is hardly surprising that Brent has risen in response to the conflict, even though the risk of actual delivery outages is small," Commerzbank says in a morning note to clients.

The Ukraine situation is overshadowing everything, but there has been some key economic data out Monday morning, keeping the pound strong.

The UK's manufacturing sector expanded for the eleventh successive month in February, and to a slightly larger extent than in the prior month, according to survey data from Markit Economics and the Chartered Institute of Purchasing and Supply.

The seasonally adjusted index advanced to 56.9 in February, from a revised 56.6 in January. PMI readings above 50 indicate growth in activity, while those below show contraction. The index has now stayed above the neutral mark for the eleventh straight month.

The strengthening domestic market remained the primary driver of the manufacturing recovery, underpinning an eleventh successive monthly rise in production volumes, Markit said.

The latest data on the UK housing market showed that the recovery is continuing. Property tracking website Hometrack reported that the average asking price for a house in the UK was up 0.7% on month in February, compared with 0.3% growth in January. On a yearly basis, house prices climbed 5.4%, accelerating from the 4.8% increase in the previous month.

Meanwhile, British mortgage approvals hit their highest level since November 2007 in January, data from the Bank of England showed. Lenders approved 76,947 mortgages during the month.

Net lending to individuals fell to GBP2.1 billion in January, from GBP2.3 billion in December, missing economists' expectations of an expansion to GBP2.5 billion. Consumer credit expanded to GBP0.66 billion in January, from 0.58 billion in December, although economists had expected a further expansion to GBP0.7 billion.

European manufacturing PMI's for February were broadly positive, with all the major European countries, bar Italy, exceeding economists' expectations. Germany recorded 54.8 in February, up from 56.5 in January and exceeding expectations of 54.7. Italy's growth slipped slightly to 52.3, down from 53.1 in January and missing expectations of 52.8, although still recording expansion. Coming in under 50.0, at 49.7, France's manufacturing sector is still in contraction, although the reading is slightly improved from the 49.3 recorded in January.

The Eurozone composite PMI was revised up to 53.2 in February, from the preliminary reading of 53.0, although confirming a slowdown from 54.0 in January.

In China, the PMI dropped to 48.5 in February from 49.5 in January. The February score was slightly higher than the flash estimate of 48.3 but dropping for a seventh successive month amid faltering demand both at home and abroad, adding to concerns that economy is facing downside risks from weak industrial activity.

International Monetary Fund Managing Director Christine Lagarde has warned that the risk of prolonged low inflation is looming in the euro area and it could derail the recovery.

High debt levels continue to hold momentum back, and financial fragmentation persists, she said in Spain. The lender forecast the euro area to grow 1% in 2014 and 1.4% next year. Lagarde urged the currency bloc to complete the banking union and to repair bank balance sheets. Further, she called upon more accommodative policies and targeted measures to address low inflation.

In world news, anti-government protesters retreated from four occupied intersections in the Thai capital Sunday, but vowed they were not giving up their struggle. Suthep Thaugsuban, leader of the People's Democratic Reform Committee, called Friday for his followers to vacate several vital intersections occupied since the launch of the Bangkok Shutdown campaign, and to fall back to Lumpini Park in the city centre. The move to withdraw followed clashes and attacks on the protesters this month that left 12 people dead, including four children.

Dozens of Libyans Sunday stormed the building of the parliament in the capital Tripoli in protest against the extension of its mandate, the official Libyan News Agency reported. "The demonstrators had set fire in the vicinity of the National Congress before storming its hall while members were in session," the parliament's spokesman Omar Humaydan said. He added that some protesters were armed and attacked the members, some of them were later hospitalized.

Earlier in the day, anti-parliament activists had blocked roads to the parliament to protest an attack by Congress' supporters on protesting campers outside the building, according to local media.

Egypt's new Prime Minister Ibrahim Mehleb called for an end to labour strikes and protests, which are straining the economy. "The time has come for work and productivity," Mehleb said. "Let us end all kinds of protests and sit-ins and strikes."

Israel's Prime Minister Benjamin Netanyahu, meanwhile, vowed not to give into pressure over the country's peace negotiations with the Palestinians and the Iranian nuclear issue, as he took off for a five-day trip to the US. "I will stand firmly on the state of Israel's vital interests, first and foremost among them the security of our citizens," Netanyahu said.

A magnitude-6.6 earthquake struck south-western Japan early Monday, the Meteorological Agency said. No casualties or damage were reported and no tsunami warning was issued.

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FTSE 100: Down 1.7% at 6,697.00
FTSE 250: Down 2.1% at 16,375.35
AIM ALL-SHARE: Down 1.1% at 883.25
GBP-USD: 1.6730
EUR-USD: 1.3770
GOLD: USD1,346.70 an ounce
OIL (Brent): USD112.06 a barrel

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KEY UK CORPORATE NEWS:

FTSE 100: AstraZeneca said the US Food and Drug Administration has approved its Bydureon Pen injectable suspension treatment for type 2 diabetes as an adjunct to diet and exercise to improve glycaemic control in adults. Intertek Group has reported higher 2013 revenues and profits, helped by the seven acquisitions it made during the year, as it also said it will buy United Arab Emirates-based International Inspection Services From Lamprell for USD66 million, or GBP40 million, in cash. Royal Bank of Scotland Group is considering merging its struggling Irish business, Ulster Bank, with Irish rivals after being unable to stem the huge losses at the unit or to find a buyer, the Sunday Times newspaper reported.

FTSE 250: Keller Group reported a 70% increase in profit for the recent full-year, boosted by acquisitions and improved operating margins across its four geographical divisions. Manufacturing group Senior reported a fall in profit for the full-year, as last year's resulted were boosted by discontinued operations. Ultra Electronics Holdings reported a steep decline in 2013 pretax profit as it booked a GBP44.2 million writedown on its Prologic business after the unit was hit by the US budget uncertainties and October's federal government shutdown. Hiscox has agreed to acquire online insurer DirectAsia from the Whittington Group for USD55 million plus an earn out over four years. Amlin has reported a 23% rise in 2013 pretax profit as a solid underwriting performance was supported by a quiet year for major catastrophes. HellermannTyton Group reported a fall in pretax profit for the full-year after it booked larger finance costs, but revenues rose 17% as it saw strong growth in the car, bus and truck markets in all regions. Al Noor Hospitals Group reported an increase in profit and revenue for the full-year, driven by a 11.1% and 13.7% growth in outpatient and inpatient volumes, respectively.

AIM: Hardide is a top gainer after the surface-coating technology company said it has won a major deal - providing a guaranteed revenue of about USD1.3 million over the next two years - to supply a coating for a single component currently used by General Electric Company Inc and could win further business under the deal if development and testing work is successful. Leed Resources is also up after its directors agreed to cancel all their outstanding share options as part of its efforts to turnaround the business. Asian Plantations is doing well after it confirmed it is in talks with a number of parties that could lead to a sale of its whole business. Triple Plate Junction is up after it sold its 25% interest in exploration licence EL 1365 to Niuminco Group Ltd in return for a 3.0% net smelter royalty payable on any production from the tenement in Papua New Guinea. Sabien Technology Group is another gainer after the group said that it has received orders worth GBP375,000 since the announcement of its half-year results in February. Castleton Technology is up after it agreed to sell the trade and certain assets of its QAD software consultancy business to Glantus Ltd for GBP200,000 in cash, including GBP50,000 deferred for six months.

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AFTERNOON WATCHLIST: ECB President Draghi's speech, US Markit Manufacturing PMI, US ISM Manufacturing PMI, US Construction Spending

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Tuesday's Key UK Corporate Events

Devro Full Year Results
Abcam Full Year Results
Ashtead Group Q3 Results
Glencore Xstrata Full Year Results
Meggitt Full Year Results
Pace Full Year Results
Serco Group Full Year Results
Regus Group Full Year Results
Rotork Full Year Results
MoneySuperMarket.com Group Full Year Results
Jardine Lloyd Thompson Full Year Results
Tullett Prebon Full Year Results
Vesuvius Full Year Results
Breedon Aggregates Full Year Results
Perform Group Full Year Results
Fresnillo Full Year Results
Arrow Global Group Full Year Results

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Tuesday's Key Economic Events

01:30 Japan Labor Cash Earnings
09:30 UK PMI Construction
10:00 EU Producer Price Index
13:55 US Redbook index
14:45 US ISM New York index
23:50 US Total Vehicle Sales

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By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance

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