FTSE 100 drops as investors await outcome of Russia-Ukraine peace talks
British stocks plunged on Thursday morning, with the FTSE 100 index slipping slightly as investors eagerly awaited the outcome of peace talks between Russia and Ukraine. Ukraine has already mentioned that it is open to peace talks, but is not inclined to cede territory.
The uncertainty has contributed significantly to investor anxiety, especially as Western sanctions and bans on Russian suppliers strain oil and commodity markets around the world.
European stocks reflected the same pessimistic sentiment, as investors eagerly awaited the European Central Bank’s monetary policy meeting. Speculation about Christine Lagarde taking a more dovish approach and choosing to wait and assess the situation before taking any significant action abounded.
Overnight in Asia, Hong Kong’s Hang Seng Index (HK50) climbed, as did the US S&P 500 Index (US500).
What is interesting today: National Express Group (NEX) has announced a full-year profit, after the company revealed it was considering its options for Stagecoach (SGX) after a rival company increased its bid. DS Smith (SMDS) said it expects box volume growth to offset rising costs, further boosted by rising prices.
Why are stocks down today?
After about two weeks of fighting, the Russian-Ukrainian peace talks finally seem to be on the table and investors are eagerly awaiting the outcome.
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- What does that mean: The Russian-Ukrainian conflict has thrown the whole world into turmoil, with a particularly harsh impact on oil and commodity markets and supply chain constraints pushing prices even higher.
Russia has also faced a number of international sanctions from mainly Western powers, which have further aggravated the situation. Therefore, investors hope that the peace talks will lead to a rally in the markets in the near future.
Stock markets: highlights
- The FTSE 100 (UK100) index fell slightly by 1.10% to 7,111.9 points.
- The Euro Stoxx 50 (EU50) index fell 2.21% to 3,682.7 points.
- The German DAX index (DE40) fell 2.07% to 13,561.3 points.
- The French CAC 40 index (FR40) fell slightly by 2.10% to 6,253.6 points.
- The main sectors in the UK were financials and mining, while consumer services and consumer staples were affected.
- US futures on the S&P 500 fell 0.55% to $4,251.3.
- The Chicago Board Options Exchange (CBOE) Volatility Index, or VIX (VIX) – a measure of expected swings in US stocks – rose to 33.31.
- The US Dollar Index (DXY) fell to $98.29.
- The yield on US 10-year bonds fell to 1.946%.
Main buyers: United Kingdom and Europe
- The main equity gainers in the UK were London Stock Exchange Group (LSE), M&G (MNG) and Glencore (GLEN).
- Shares of the London Stock Exchange Group rallied after the company announced it would stop disseminating news in Russia.
- M&G shares edged higher after the company recently purchased TCF to venture into the portfolio market.
- Glencore shares edged higher after Barclays (BARC) recently raised its price outlook.
- The best performing companies in Europe were Adidas (ADSGN), Deutsche Post (DPW) and Adyen BV Parts Sociales (AYDEN.AS).
- Shares of Adidas gained following the company’s announcement that it would close its stores and online site in Russia.
- Deutsche Post shares edged higher on the company’s increased dividends as earnings rose.
- Shares of Adyen BV Parts Sociales rose following the recent awarding of the company an “outperform” rating by Credit Suisse.
Main losers in equities: UK and Europe
- The worst performing companies in the UK were Polymetal International (POLY), Evraz (EVRgb) and ITV (ITV).
- Shares of Polymetal International fell following the LSE’s cancellation of trading in the company’s shares.
- Shares of Evraz fell after the company announced it would drop from the FTSE 100 index by the end of this month.
- The main equity losers in Europe were Vonovia (VNA), Inditex (ITX) and Ab InBev (BUD).
- Vonovia shares plunge despite recently earning a “buy” rating from Goldman Sachs (GS).
- Inditex shares fell after the company announced it was temporarily halting business operations in Russia.
- Shares of Ab InBev fell slightly after the company struggled with declining margins in recent months.