Last checked at 
(Alliance News) - Stock prices in London were sharply lower at midday on Tuesday, as the Russian assault on Ukraine intensified, with fears the invading forces are set to launch assaults aimed at taking control of the capital Kyiv and other major cities.
Russia will continue the offensive in Ukraine until its "goals are achieved", Defence Minister Sergei Shoigu said.
"Russian armed forces will continue to conduct the special military operation until set goals are achieved," Shoigu told at a press conference aired on state television on Tuesday. He said Moscow aims to "demilitarise and de-Nazify" Ukraine, as well as protect Russia from a "military threat created by Western countries".
The FTSE 100 index was down 72.50 points, or 1.0%, at 7,385.75. The mid-cap FTSE 250 index was down 309.48 points, or 1.5%, at 20,771.57. The AIM All-Share index was down 6.69 points, or 0.8%, at 1,033.67.
The Cboe UK 100 index was down 1.0% at 735.24. The Cboe 250 was down 1.3% at 18,489.78, and the Cboe Small Companies down 0.6% at 14,713.80.
In mainland Europe, the CAC 40 in Paris was down 2.4%, while the DAX 40 in Frankfurt was down 2.3%.
Russian forces struck cities in eastern Ukraine and massed armoured vehicles and artillery near the capital Kyiv, as Western powers promised further sanctions to bring down Russia's economy. More than 350 civilians have been killed in the fighting and hundreds of thousands of Ukrainians have fled into neighbouring countries.
In the FTSE 100, defence contractor BAE Systems was the best performer among a handful of stocks, up 2.7%, on expectations of increased military spend from world governments.
"Russia's aggression changes our pecking order in the sector. Defense is back in favour despite the 25% rally, as procurement could be up 50% over the next 5 years and valuation could expand 25%. We thus reiterate our Buy case on BAE," said Jefferies analyst Chloe Lemarie.
At the other end of the large-caps, Russia-focused metals and mining stocks Evraz and Polymetal International were, once again, the worst performers, down 27% and 13% respectively. Evraz and Polymetal are both down 76% over the past month alone. Russian gold miner Petropavlovsk was the biggest midcap faller, down 25%.
Investment manager abrdn was down 5.0% despite reporting its first increase in annual revenue since the merger that created the current company.
The Edinburgh-based firm, whose name is a shortening of Aberdeen, reported IFRS pretax profit of GBP1.12 billion in 2021, up 33% from GBP838 million, as fee-based revenue rose by 6.3% to GBP1.52 billion from GBP1.43 billion in 2020.
The rise in revenue was the first since Standard Life merged with Aberdeen Asset Management in 2017 to create, at the time, Standard Life Aberdeen, later changed to abrdn.
The results came as Sky News reported on Monday that abrdn has so far struggled to find a buyer for its stake in Russian oil firm Rosneft. abrdn's Rosneft stake is worth about GBP5 million and is passively held through abrdn funds.
Commenting on the abrdn results, Rob Murphy, head of Financials at Edison, said: "Looking ahead, rising inflation and geopolitical uncertainties will certainly present challenges, but exposure to Russia, Ukraine and Belarus is low at only 0.5% of assets. More importantly, investors will be watching for continuing improvement in net flows and profitability as well as the performance of the newly acquired Interactive Investor platform."
In the FTSE 250, Reach was down 22%. The newspaper publisher warned the damage caused by rising inflation in 2022 is expected to be worse than in recent years and lead to a "modest" reduction in operating profit.
For 2021, pretax profit was GBP73.3 million, up from GBP400,000 in 2020 on revenue of GBP615.8 million, up from GBP600.2 million in 2020. Operating profit rose to GBP146.1 million from GBP133.8 million.
Looking ahead, Reach said: "The business is transitioning to become more digitally driven and the ongoing cost base reshaping will in part help fund continued investment. However, the impact from inflation, which began to affect the business towards the end of 2021, has now intensified, particularly in print production.
"This has primarily been reflected in the cost of newsprint (paper for printed products), which having previously been impacted by rising distribution costs and supply challenges, now also reflects the significant increase in energy prices. As a result, the gross impact of inflation in 2022 is expected to be higher than in recent years."
The pound was quoted at USD1.3422 at midday on Tuesday, flat on USD1.3415 at the London equities close Monday, following upbeat UK economic data.
UK manufacturing sector activity accelerated in February amid an easing of raw material shortages and supply chain blockages, IHS Markit said.
The IHS Markit-CIPS manufacturing PMI rose to a three-month high of 58.0 points in February, up from the preliminary reading of 57.3, which also was January's score. The PMI has remained above the neutral 50.0 mark for 21 successive months.
The euro was priced at USD1.1200 at midday, down from USD1.1243 late Monday.
On the continent, manufacturing growth slowed slightly in the eurozone in February but was still strong, with demand keeping pace with January and fewer delivery delays, survey data from Markit showed.
The IHS Markit eurozone manufacturing purchasing managers' index fell to 58.2 in February, down from 58.7 in January and also from the flash reading of 58.4.
Brent oil was quoted at USD101.21 a barrel on Tuesday at midday, up sharply from USD97.65 late Monday, ahead of the OPEC+ meeting on Wednesday.
Gold stood at USD1,922.18 an ounce, advancing from USD1,900.27 late Monday amid a flight to safety. Against the safe-haven yen, the dollar was trading at JPY114.81 in London, lower against JPY115.27.
New York was pointed to a lower start as US President Joe Biden prepares to deliver the State of the Union address later on Tuesday to mark his maiden year in office.
The Dow Jones Industrial Average was called down 0.5%, the S&P 500 down 0.5% and the Nasdaq Composite down 0.6%, based on futures trading. The indices closed down 0.5%, 0.2% and 0.4% respectively on Monday.
Biden has been bouncing between calamities as the first year of his presidency draws to a close, from waves of Covid variants to economic turmoil, rampant inflation, a decline in approval ratings and Russia's invasion of Ukraine.
Yet when he addresses Tuesday's joint session of Congress, Biden will accentuate the positive.
Asked for the 79-year-old president's top line, his Press Secretary Jen Psaki told ABC News: "His belief in the resilience of the American people and the strength of the American people."
Biden claims he is delivering on his big promises to unify the nation, end Covid-19, and restore US prestige abroad.
In a new Washington Post-ABC poll, only 37% approve of Biden's presidency, and 55% disapprove. An NPR poll found that more than half the country considers Biden's first year a failure.
Shares in Zoom Video Communications were down 3.8% in pre-market activity in New York. The stock had fallen in after-hours trade on Monday, hurt by an underwhelming outlook.
The video conferencing firm, which saw its fame and fortune skyrocket during the pandemic, expects revenue growth to slow in its latest financial year.
In the fourth quarter ended January 31, revenue increased 21% to USD1.07 billion from USD882.5 million a year earlier. For the financial year as a whole, revenue increased 55% to USD4.10 billion from USD2.65 billion. For the new financial year, Zoom expects revenue between USD4.53 billion and UD4.55 billion. At best, this would represent growth of just 11%.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.
