(Alliance News) - London's FTSE 100 opened cautiously higher on Wednesday, though mainland European indices, which had produced stronger advances on Tuesday following Russia's announcement of a de-escalation, suffered in early trading.
Optimism turned to scepticism overnight as the West cast doubt on Moscow's pledge.
Ukraine President Volodymyr Zelensky himself sounded a note of cautious optimism following the day's talks – though he said the "positive" signals "do not drown out the explosions or Russian shells" and vowed in a video address late Tuesday to keep up defence efforts.
The FTSE 100 index was up 12.45 points, or 0.2%, at 7,549.70 early Wednesday. The mid-cap FTSE 250 index fell 134.60 points, or 0.6%, to 21,357.37. The AIM All-Share index was down 2.18 points, 0.2%, at 1,044.21.
The Cboe UK 100 index was up 0.3% at 750.95. The Cboe 250 was down 0.5% at 18,897.07, and the Cboe Small Companies was 0.2% higher at 15,377.69.
In Paris, the CAC 40 index was down 0.7%, while the DAX 40 in Frankfurt fell 1.1%.
"Reports that Russia is de-escalating military operations around Kyiv have further buoyed market risk sentiment, although the Kremlin said it does not amount to a ceasefire and it was met with some scepticism in the US," analysts at Lloyds Bank commented.
Inflation will also be in focus, with figures from Spain, Italy and Germany due on Wednesday.
Lloyds analysts added: "Eurozone inflation, as elsewhere, has risen significantly in recent months, even before the war in Ukraine which has highlighted Europe’s dependency on Russian gas and other energy imports. The conflict has the potential to drive eurozone annual headline inflation rates sharply higher from the already elevated 5.8% in February.
"The March flash CPI estimate is due on Friday, but key national inflation data will be released ahead of that including Spanish and German figures today, followed by France and Italy tomorrow. In particular, the national outturns will be watched closely for signs that the Eurozone flash CPI in March will jump up by more than the consensus forecast of 6.7% (our central forecast is 7.3%)."
Already out, Spain reported March consumer price inflation of 9.8%, accelerating from 7.6% in February.
In the US calendar, the latest ADP jobs report is released at 1315 BST, before US gross domestic product data at 1330 BST.
Ahead of the economic data, the dollar was mixed.
The pound was quoted at USD1.3120 early Wednesday in London, down from USD1.3135 late Tuesday. The euro stood at USD1.1128, up from USD1.1113. Against the yen, the dollar was trading at JPY121.86, down from JPY122.57.
Brent oil was quoted at USD112.68 a barrel early Wednesday in London, up from USD109.35 at the European equities close on Tuesday.
In London, BP rose 1.4% and Shell was up 2.6%, tracking oil prices higher. Tullow Oil was the best mid-cap performer, up 2.2%. Over in Paris, TotalEnergies was 2.2% higher.
Gold stood at USD1,924.08 an ounce early Wednesday, up from USD1,910.78 late Tuesday.
John Menzies rose 3.9% at 592.00 pence. The aviation services firm accepted a formal takeover offer from GIL International Holdings V, a subsidiary of Kuwait's Agility Public Warehousing.
The deal, at 680 pence per share, values John Menzies at GBP571 million on a fully diluted basis and offers an enterprise value of GBP763 million.
The consideration is 81% higher than the company's share price of 335p on February 8, the day before it entered an offer period. It is 19% higher than its 570p closing price on Tuesday.
Menzies has a market capitalisation of GBP544.2 million.
The deal ends a long-running saga. Back in early-February, Menzies said it rejected a 510p bid from its Kuwaiti suitor. It followed a previous unsolicited cash offer of 460p a share, the company explained.
Video game services firm Keywords Studios posted double-digit growth in revenue and profit. The stock was 3.8% higher.
In 2021, revenue rose 37% to EUR512.2 million from EUR373.5 million. Pretax profit jumped 48% to EUR48.0 million from EUR32.5 million.
Keywords recommended a final 1.45p dividend, taking its annual payout to 2.15p It did not pay a dividend in respect to 2020.
It has also made a decent start to the new year, it noted.
Keywords expects 2022 to be a "particularly strong year for new game launches".
For 2022, Keywords expects an annual outturn at the top end of current market expectations.
Company-compiled consensus has revenue for 2022 at a EUR587 million to EUR610 million range, with adjusted pretax profit between EUR90 million and EUR95 million.
Elsewhere in the video game sector, Team17 fell 5.9%. Although the video game developer reported stronger annual results, it warned of rising costs and the impact of Russia's invasion of Ukraine.
Pretax profit rose 11% in 2021 to GBP29.1 million from GBP26.2 million in 2020. Revenue was 9.0% higher at GBP90.5 million from GBP83.0 million.
Team17 said: "The board continues to be mindful of the ongoing impact of the pandemic including uncertain working environments alongside cost of living and wage inflation, the combination of which are expected to increase group costs in FY22 by GBP1.7 million."
In addition, it expects the situation in Ukraine to hit revenue by GBP4 million and hurt its earnings before interest and tax by GBP2.5 million.
Petropavlovsk shares were 0.6% lower, but they initially had slumped 14% shortly after the open. The gold miner said it is mulling a debt restructuring with Russian lender Gazprombank, which has been sanctioned.
An interest payment of USD560,000 was due to be paid by Petropavlovsk last week Friday. In addition, a payment worth the ruble equivalent of USD9.5 million under a revolving credit facility was due on Monday.
As a consequence of the sanctions, the company was unable to pay either of those.
Petropavlovsk last week Friday warned it has a USD200 million term loan and a USD86.7 million revolving credit facility with Gazprombank.
A condition of the financing means Gazprombank acts as an off-taker for all of Petropavlovsk's gold output.
Petropavlovsk on Wednesday said it is in the "early stages of discussions with its advisers and Gazprombank" in relation to a potential restructuring of its debt.
The company has a USD500 million 8.125% set of guaranteed notes scheduled for maturity in November.
Asian stocks closed higher on Wednesday.
In Sydney, the S&P/ASX 200 rose 0.7% on Wednesday. The Nikkei 225 ended 0.8% lower in Tokyo. The Shanghai Composite closed up 2.0%, and the Hang Seng in Hong Kong was 1.6% higher in late trade.
By Eric Cunha; ericcunha@alliancenews.com
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