(Alliance News) - London's FTSE 100 index posted cautious gains on Tuesday amid some upbeat corporate earnings, but the move higher looked fragile against the escalating crisis in Ukraine.
"Oversold stock markets have found some relief in the short-term, but prevailing risk off sentiment should gain the upper hand soon once the next development in the Russia-Ukraine crisis arrives," said Chris Beauchamp, chief market analyst at online trading platform IG.
The FTSE 100 index closed down 9.88 points, or 0.1%, at 7,494.21. The FTSE 250 ended down 103.86 points or 0.5%, at 20,993.33, and the AIM All-Share closed down 9.91 points, or 1.0%, at 1,031.62.
The Cboe UK 100 ended down 0.2% at 744.90, the Cboe UK 250 closed down 0.3% at 18,808.20, and the Cboe Small Companies ended down 1.0% at 15,118.03.
In European equities on Tuesday, the CAC 40 in Paris ended flat and the DAX 40 in Frankfurt ended down 0.3%.
European stock markets were mixed on Tuesday as Russia faced a furious global diplomatic and economic backlash after President Vladimir Putin ordered his forces into Ukraine to secure two breakaway regions.
Germany announced it was halting certification of the Nord Stream 2 gas pipeline from Russia and said the EU would adopt "robust and massive" economic sanctions.
The White House welcomed Germany's decision on the pipeline, and said it would reveal its own measures later. Britain slapped sanctions on five Russian banks and three billionaires.
World powers are still trying to decide whether Putin's deployment of so-called "peacekeepers" constitutes the feared invasion they warned would trigger potentially crippling sanctions.
Commenting on Tuesday's market performance, CMC Markets chief market analyst Michael Hewson said: "Declines rather surprisingly proved fairly short-lived, with the lack of follow through on the downside appearing to speak to a reluctance on the part of Western leaders to call last night's move an outright invasion, as well as go all in, on a full range of sanctions."
This allowed Russia-focused firms recently hit by worries over sanctions to rebound on Tuesday. Evraz rose 5.4% and Polymetal International advanced 2.8%.
Reopening from a holiday, stocks in New York were catching up with Monday's global equity declines. The Dow Jones was down 0.9%, the S&P 500 index down 0.7%, and the Nasdaq Composite down 1.0%.
Unable to lift the mood was survey data showing business activity in the US hit a two-month high in February as the country bounced back from Covid-19 disruption at the start of the year.
The flash composite output index for February rose to 56.0 points from 51.1 in January. As any reading over the no-change mark of 50.0 indicates expansion, the latest figure signals growth accelerated sharply in February.
This was driven by a significant uptick in the services business activity index to 56.7 from 51.2 in January. The manufacturing purchasing managers' index also improved notably, coming in at 57.5 from 55.5 in January.
The dollar was mostly higher against major currency pairings as investors remained cautious. The pound was quoted at USD1.3595 at the London equities close Tuesday, down compared to USD1.3607 at the close on Monday. Against the yen, the dollar was trading at JPY114.94, up compared to JPY114.83 late Monday.
However, the euro stood at USD1.1344 at the European equities close Tuesday, firm against USD1.1338 at the same time on Monday.
The German business climate improved again in February, survey data showed, despite the aggravation of the crisis in Ukraine and persistent supply chain issues. The Ifo institute's closely watched indicator rose to 98.9 points from 96.0 in January, with companies reporting an improvement in their expectations for the near future.
Safe haven gold rose to USD1,900.36 an ounce at the London equities close Tuesday against USD1,896.42 at the close on Monday.
Brent oil was quoted at USD96.70 a barrel at the London equities close Tuesday, up from USD95.19 late Monday.
Back in London, Smith & Nephew topped the FTSE 100, rising 7.5%, after the medical technology firm reported a rise in annual profit on improved trading and revenue growth in three of its global franchises, and also appointed a new chief executive.
The Watford, England-based company posted pretax profit of USD586 million for 2021, more than doubled from USD246 million in 2020. Trading profit was USD936 million, up 37% from USD683 million in 2020, on revenue of USD5.21 billion, up 14% from USD4.56 billion.
The company has appointed Deepak Nath as its new CEO, succeeding Roland Diggelmann, who will step down by mutual agreement. Nath will take up the role on April 1 and Diggelmann will leave on March 31. Nath joins Smith & Nephew from German medical device company Siemens Healthineers, where he was president of the Diagnostics business segment.
InterContinental Hotels Group rose 4.2% amid a swing to annual profit thanks to "significantly" improved trading conditions in 2021, leading the company to reinstate shareholder payouts.
For 2021, IHG swung to a pretax profit of USD361 million from a loss of USD280 million in 2020 on total revenue that was up 21% to USD2.91 billion from USD2.39 billion. It stated that more travel demand returned as vaccines rolled out, government-mandated restrictions eased and economic activity started to rebuild.
IHG declared a total dividend of 85.9 US cents for 2021, having paid out nothing the year before.
Investment platform Hargreaves Lansdown slumped 16% on a sharp drop in profit in the first half as client activity was "calmer", while setting out its investment plans for the next 5 years.
In the six months to December 31, pretax profit slumped 20% to GBP151.2 million from GBP188.4 million. Revenue in the first half slipped to GBP291.1 million from GBP299.5 million.
Hargreaves declared an interim dividend of 12.26 pence, up 3.0% from 11.9p the year before, but has noted it will halt any special dividends for the next couple of years to, instead, focus on increased investment spending.
Over the next 5 years, from financial 2022 through financial 2026, HL plans to spend GBP175 million of "strategic investment cost to deliver future growth and operational efficiencies".
Peer AJ Bell ended down 4.5% in a negative read-across, while abrdn fell 4.6%.
Coca-Cola HBC fell 5.5% despite raising its annual payout following a double digit rise in profit and revenue as a result of higher volumes and pricing following "effective execution" in a volatile environment.
For 2021, Coca-Cola HBC posted a pretax profit of EUR734.9 million, up 23% from EUR593.9 million the year before. This was on net sales revenue which grew 17% year-on-year to EUR7.17 billion from EUR6.13 billion, and coming above consensus expectations of EUR7.07 billion.
Mid-cap John Wood tumbled 16% as it warned it will take a USD100 million exceptional charge against 2021 results, related to a project that came with its acquisition of Amec Foster Wheeler.
The Aberdeen, Scotland-based consulting and engineering firm said USD20 million of that will be in cash to complete the Aegis Poland project, with the rest being non-cash charges for "expected recovery from the customer and the legal costs needed to achieve such recovery".
However, the company said that its underlying results for 2021 and outlook for 2022 remain unchanged from the trading update it provided in January.
The UK corporate calendar on Wednesday has full-year results from lender Barclays, miner Rio Tinto and luxury car maker Aston Martin.
In Wednesday's economic calendar, there is Gfk German consumer confidence at 0700 GMT and eurozone inflation at 1000 GMT. Financial markets in Japan will be shut for the Emperor's Birthday holiday.
By Lucy Heming; lucyheming@alliancenews.com
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