LONDON MARKET CLOSE: FTSE 100 outperforms on strong energy stocks

Tue, 05th Apr 2022 17:13

(Alliance News) - The FTSE 100 outperformed European peers on Tuesday as the EU looks to ramp up sanctions on Russia - which could hurt energy flows on the continents, further pressuring inflation.

The FTSE 100 index closed up 54.80 points, or 0.7%, at 7,613.72. The mid-cap FTSE 250 index was up 27.09 points, or 0.1%, to 21,356.98. The AIM All-Share index ended up 1.24 points, or 0.1%, at 1,056.50.

The Cboe UK 100 index closed up 0.4% at 756.10. The Cboe 250 was up 0.1% at 18,810.64, and the Cboe Small Companies ended down just 2.80 points at 15,531.00.

The EU is considering to hit Russia with sanctions on oil or coal over the war in Ukraine, a top official said on Tuesday, though some countries remain worried of the potential economic fallout.

The EU and US are currently preparing more sanctions against Russia after allegations that Russian forces carried out war crimes when dozens of bodies were discovered near Kiev.

The Europeans are under pressure to hit Moscow in the crucial energy sector and stop paying out the huge proceeds from gas, oil and coal that are helping Russia pay for the war.

The European Commission in Brussels draws up sanction decisions but adoption requires unanimity across the 27 member states.

"Markets in Europe have had a slightly softer tone after it was announced that the EU was proposing a mandatory phaseout of Russian coal imports in response to the atrocities committed by Russian forces in and around Kyiv, and in Bucha in particular," CMC Markets analyst Michael Hewson said.

"While this is likely to have a limited impact, the pressure is growing for this commitment to be extended to oil and gas supplies. For now, this is meeting significant resistance from the likes of Germany and Hungary, with some suggesting that Germany cares more about the economic impact of doing this than it does about the fact that unarmed civilians have been massacred."

In mainland Europe, the CAC 40 in Paris ended down 1.3%, while the DAX 40 in Frankfurt closed down 0.7%.

"The FTSE100 is outperforming with the more defensive energy sector holding up well, ahead of the publication of the UK governments new energy security strategy later this week, with SSE shares hitting a new record high, while National Grid and United Utilities shares have also moved higher," Hewson added.

SSE gained 3.4%, National Grid 3.6% and United Utilities advanced 3.5%.

At the other end of the blue chip index, Airtel Africa ended the worst performer, losing 4.0%, after the telecommunications provider said it has adopted regulatory SIM card measures at its Nigeria telecommunications unit, though the financial impact of the move is uncertain.

Under a directive announced by the Nigerian Communications Commission back in December 2020, operators were required to ensure all their subscribers provided a valid National Identification Number to update SIM registration records.

The Africa-focused telecommunications provider on Tuesday said that so far, it has collated NIN records for 73% of its Nigeria active customer base, accounting for 79% of revenue at the unit.

In the midcaps, Moonpig ended 5.2% lower despite lifting its revenue guidance for financial 2022 on a strong trading performance and expressed confidence in a permanent uplift in "customer cohort frequency."

The London-based online greeting card and gifting company said its performance for the financial year to April 30 has remained strong.

Moonpig lifted its annual revenue expectations to GBP300 million, with the upgrade reflecting "the temporary impact of Covid-19 on customer behaviour in late December and January."

Moonpig stated that trading in February and March has provided further evidence that supports the expectations of a "permanent uplift in customer cohort frequency" compared to before Covid-19.

IP Group advanced 4.1% in the FTSE 250 after the intellectual property commercialisation company said its stake in its portfolio company First Light Fusion is set to double after the company achieved fusion.

IP noted First Light's achievement of fusion with a projectile approach; the first of its kind, which has been independently validated by the UK Atomic Energy Authority. IP Group said its 27% holding in First Light was valued at GBP57.3 million at December 31, and it now expects the value to double by around GBP57 million, or around 5 pence per share.

Brent was quoted at USD107.07 a barrel, down from USD107.45 late Monday. Gold stood at USD1,926.80 an ounce, soft from USD1,930.80 late Monday.

The pound was quoted at USD1.3115 on Tuesday evening, down from USD1.3121 late Monday after data from S&P showed the UK service sector activity accelerated in March at its fastest pace since May 2021.

The S&P Global-CIPS UK services PMI rose for the third month running to reach 62.6 points in March, up from 60.5 in February. The reading was higher than the preliminary estimate of 61.0.

S&P said UK service providers signalled a strong increase in business activity during March, and the rate of expansion accelerated to its fastest for 10 months. Survey respondents widely noted that the removal of pandemic restrictions and return to offices had led to a sharp rebound in customer demand, it noted.

The euro was priced at USD1.0927, down from USD1.0996 late Monday. Against the yen, the dollar was trading at JPY123.38 in London, up from JPY122.70.

The eurozone's private sector growth faded in March, figures showed, after hitting a five-month high the month prior.

The "main impetus" for March's growth came from the services economy, S&P Global noted. Eurozone factories saw progress slow in March.

The S&P Global services purchasing managers' index inched up to 55.6 points in March, from 55.5 in February. The composite PMI, calculated using the services and manufacturing scores, slipped to 54.9 in March, from 55.5 in February.

In the US, Wall Street was taking its cue from Europe with a soft open. The Dow Jones Industrial Average was down 0.1%, the S&P 500 down 0.5%, and the Nasdaq Composite down 1.5%.

In the international economics events calendar on Wednesday, there is German factory orders, eurozone producer prices, UK construction PMI and the US central bank will release the minutes from its most recent monetary policy meeting.

In the local corporate calendar, there is full year results from Hilton Food Group, Wentworth Resources, while Topps Tiles and Hyve Group will issue trading statements.

By Paul McGowan; paulmcgowan@alliancenews.com