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London close: Stocks mixed ahead of next round of peace talks

Mon, 28th Mar 2022 15:19

(Sharecast News) - London stocks closed in a mixed state on Monday, as investors watched for developments from the next round of peace talks between Russia and Ukraine, being held in Turkey.

The FTSE 100 ended the session down 0.14% at 7,473.14, while the FTSE 250 managed gains of 0.54% to 21,070.03.

Sterling was in negative territory, last falling 0.73% against the dollar to trade at $1.3086, and slipping 0.59% on the euro to €1.1932.

David Madden, market analyst at Equiti Capital, said the mood in Europe was relatively optimistic on Monday, despite the fact the war in Ukraine was not showing any signs of ending soon.

"Delegates from Ukraine and Russia will meet in Turkey this week, but political pundits are not holding out too much hope that major progress will be made," Madden noted.

"There is talk that Russian forces are changing their tactics - that they are doing their best to occupy a large portion of eastern Ukraine, and use that as a starting point for negotiations.

"Ukraine's president Volodymyr Zelenskyy has talked about the prospect of his country adopting a neural position in a bid to appeal to the Russian government."

On the economic front, footfall at UK shops rose 7.8% on the week last week, according to retail experts Springboard, with high streets, retail parks and shopping centres all welcoming more custom.

Footfall increased in all three destination types, with a 9.8% uptick in high streets, a 5.8% increase in retail parks and a 5.5% improvement in shopping centres.

Springboard said the increase was principally due to good weather throughout much of the week, with the greatest footfall rise occurring in coastal towns, up 16.6%, while Greater London footfall rose 12% and market towns footfall was up 11.5%.

Footfall also rose on every day of the week, with the greatest rises on Wednesday and Saturday, when it was likely that some trips were prompted by Mother's Day on Sunday.

"Last Wednesday marked two years since the beginning of the first lockdown and delivered positive news for UK retail destinations last week, which was helped by warm and sunny weather across the UK which lasted the entire week," said Diane Wehrle, insights director at Springboard.

"Not only did footfall rise significantly from the week before across UK retail destinations as a whole, but there were strong rises in each of the three destination types.

"As is typically the case when we benefit from good weather, high streets benefited most with a week on week increase that was nearly double that in shopping centres and retail parks."

Elsewhere, Bank of England Governor Andrew Bailey warned that the shock to real incomes from rising energy prices was looking to be worse than those seen in the 1970s.

Speaking at an event organised by Brussels-based economic think tank Bruegel, Bailey said: "In the UK and elsewhere, we are facing a very large shock to aggregate income and spending."

"This really is a historic shock to real incomes. The shock from energy prices this year will be larger than every single year in the 1970s."

Oil and gas prices were already rising steeply before Russia invaded Ukraine, which caused them to surge even higher.

In response, the Bank of England has lifted interest rates three times since December, to 0.75%, as it looks to contain inflation without dampening economic growth.

Prices for the thick black stuff were slipping back across the global day on Monday, with Brent crude futures last down 5.93% on ICE at $113.60 per barrel, and West Texas Intermediate 6.27% lower on NYMEX at $106.76.

Across the channel, S&P Global Ratings cut its forecast for economic growth in the eurozone, amid those same soaring energy prices.

The credit ratings agency has reduced its annual growth forecast to 3.3% from 4.4%.

"It said the region was likely to avoid recession, but that growth would be held back as higher gas and oil prices - caused by the war - hit household spending.

"Thanks to a strong recovery momentum and sufficient cash buffers, we don't expect a full-year recession but rather a drop in GDP growth to 3.3% this year versus 4.4% previously," S&P noted.

"Uncertainty surrounding our forecasts is higher than usual, with downside risks to growth for 2022 and upside risks for inflation this year and the next."

In equity markets, travel stocks were among the top gainers, with BA owner IAG up 1.89%, budget airline Wizz Air ahead 4.04%, and travel organiser TUI 4.46% higher.

Shares in Russia-focused gold miner Polymetal International rocketed 38.21%, as it continued its rollercoaster ride amid the war in Ukraine.

On the downside, aerospace and defence giant Rolls-Royce tumbled 10.68%, having surged late on Friday after markets blog Betaville said it might be involved in a "significant corporate transaction, such as a merger or even a takeover offer for the business itself".

According to Betaville, an unknown suitor may be in the early stages of weighing a deal "for or with Rolls-Royce".

Barclays was off 4.08% after the bank said it was expecting a £450m charge, and would delay a share buyback until the second quarter, after issuing almost twice as many US structured and exchange-traded notes as it had registered for sale.

NatWest reversed earlier gains to close 0.32% weaker, after announcing the buyback of a 4.01% stake from the UK government for £1.2bn, taking the British taxpayers' holding to below 50% for the first time since the financial crash of 2008.

The bank said it would cancel the shares once repurchased.

NatWest - then known as the Royal Bank of Scotland Group - was bailed out by the taxpayer to the tune of £45bn, as the global financial system faced meltdown after predatory lending and excessive risk-taking by the sector.

Miners Antofagasta and Anglo American were both lower, by 1.61% and 2.09%, as metal prices fell, while oil plays fared similarly on weaker energy prices, with Tullow Oil down 4.27% and Harbour Energy 3.11% weaker.

Outside the FTSE 350, Ted Baker lost 2.22% after rejecting two unsolicited non-binding proposals from private equity firm Sycamore.

The fashion retailer said Sycamore made a 130p a share cash proposal on 18 March and another at 137.5p a share on 22 March.

Market Movers

FTSE 100 (UKX) 7,473.14 -0.14%

FTSE 250 (MCX) 21,070.03 0.54%

techMARK (TASX) 4,321.84 0.03%

FTSE 100 - Risers

Reckitt Benckiser Group (RKT) 5,606.00p 2.86%

Schroders (SDR) 3,196.00p 2.37%

Aviva (AV.) 446.50p 1.99%

Experian (EXPN) 3,022.00p 1.92%

Scottish Mortgage Inv Trust (SMT) 1,008.50p 1.91%

International Consolidated Airlines Group SA (CDI) (IAG) 139.92p 1.89%

United Utilities Group (UU.) 1,088.00p 1.88%

Abrdn (ABDN) 207.10p 1.77%

Relx plc (REL) 2,344.00p 1.69%

Tesco (TSCO) 280.25p 1.63%

FTSE 100 - Fallers

Rolls-Royce Holdings (RR.) 98.38p -10.68%

Barclays (BARC) 160.48p -4.08%

BAE Systems (BA.) 731.60p -3.10%

BP (BP.) 380.90p -2.76%

Shell (SHEL) 2,062.60p -2.32%

Fresnillo (FRES) 725.20p -2.19%

Anglo American (AAL) 3,896.00p -2.09%

Antofagasta (ANTO) 1,707.00p -1.61%

Royal Mail (RMG) 354.70p -1.50%

Entain (ENT) 1,643.50p -1.35%

FTSE 250 - Risers

Polymetal International (POLY) 243.00p 38.07%

Moonpig Group (MOON) 222.60p 4.80%

TUI AG Reg Shs (DI) (TUI) 234.30p 4.46%

Wizz Air Holdings (WIZZ) 2,655.00p 4.04%

Clarkson (CKN) 3,855.00p 3.87%

easyJet (EZJ) 535.80p 3.76%

Carnival (CCL) 1,305.00p 3.69%

Currys (CURY) 92.85p 3.57%

Sequoia Economic Infrastructure Income Fund Limited (SEQI) 99.40p 3.54%

Diploma (DPLM) 2,574.00p 3.54%

FTSE 250 - Fallers

PureTech Health (PRTC) 200.00p -5.44%

Vesuvius (VSVS) 333.60p -4.69%

Tullow Oil (TLW) 51.50p -4.27%

Energean (ENOG) 1,150.00p -4.17%

QinetiQ Group (QQ.) 304.40p -3.67%

Wood Group (John) (WG.) 165.35p -3.15%

Hill & Smith Holdings (HILS) 1,494.00p -3.13%

Chrysalis Investments Limited NPV (CHRY) 174.00p -3.06%

Harbour Energy (HBR) 483.00p -3.05%

Homeserve (HSV) 851.00p -2.96%

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