FTSE 100 rises as UK government downplays exposure to Russian gas and energy

European stocks reflected similar bullish sentiment, with the Euro Stoxx 50 index rising – Photo: Shutterstock

British stocks edged higher on Wednesday morning as the FTSE 100 index was lifted by cautiously improving investor sentiment after weeks of escalating tensions over the situation between Russia and Ukraine. It may also be the result of the UK government holding emergency meetings to minimize UK exposure to gas imports from Russia.

European equities reflected a similar upbeat sentiment, with the Euro Stoxx 50 index rising as new sanctions on Russia gradually gave investors hope that this hostile situation would soon become too costly for Russia. This would hopefully pave the way for peace talks with Ukraine.

Overnight in Asia, Hong Kong’s Hang Seng Index (.HK50) fell, as did the US S&P 500 Index (.US500).

What is interesting today: Glencore has announced that it is reviewing its business activities in Russia, particularly in the holdings in Rosneft as well as in hydrogen and aluminium. Aston Martin has halted car shipments to Russia as increased sanctions against the country have made things difficult for the auto industry.

Why are stocks up today?

UK government downplays exposure to Russian gas: The UK has held emergency meetings to discuss how to minimize exposure to Russian gas and energy.

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  • What does that mean: As the UK mulls more strategies to minimize the impact of Russian companies, investors are greatly reassured that their interests will be protected from the deluge of sanctions now beating Russia. It also gave them hope that the economy could eventually recover from this new setback, at a time when the majority of businesses are still struggling to get back on their feet after the lifting of the confinements.

Stock markets: highlights

  • The FTSE 100 index (.UK100) edged up 0.62% to 7375.7 points
  • The Euro Stoxx 50 index (.EU50) rose 0.48% to 3783.9 points
  • The German DAX index (.DE40) rose 0.19% to 13931.7 points
  • The French CAC 40 index (FR40) rose by 0.48% to 6427.3 points
  • Leading sectors in the UK were mining and energy, while consumer services and consumer non-durables lagged
  • US S&P 500 futures climbed 0.70% to $4,333.8

Market sentiment

  • The CBOE Volatility Index, or VIX (.VIX), a measure of expected swings in US stocks, fell to 32.61
  • The US dollar index rose to $97.83
  • The index of US 10-year bond yields fell to 1.767%

Main buyers: United Kingdom and Europe

  • The best performing companies in the UK were Rio Tinto, Antofagasta and Anglo American
  • Rio Tinto shares continued to climb after the company recently issued the second-largest dividend on the FTSE 100 index
  • Antofagasta shares gained following the company’s announcement that it would now focus more on growth
  • Anglo American shares rose after the company also issued a bumper dividend following the rally in commodities recently
  • The main stock gainers in Europe were Flutter Entertainment, Iberdrola and Kone
  • Flutter Entertainment
  • Iberdrola shares soared after the company froze prices to protect consumers from price hikes following the invasion of Ukraine
  • Kone shares rose following the recent announcement by Vinay Kapur, head of marketing for the Americas
  • Flutter Entertainment shares rose slightly after the company recently announced its new sustainability strategy

Main losers in equities: UK and Europe

  • The worst performing stocks in the UK were Polymetal International, Evraz and Coca Cola
  • Shares of Polymetal International have struggled to recover after the company fell around 80% in the past nine trading sessions
  • Evraz shares fell after the company announced it would leave the FTSE 100 index
  • Coca Cola shares fell after the company was recently arrested for plastic pollution
  • The main stock market losers in Europe were Adidas, Allianz and Infineon
  • Adidas shares fell after the company ended its partnership with the Russian football federation
  • Allianz shares fell slightly following the company’s involvement in Russian debt
  • Infineon shares tumble after investing around $2 billion in a Malaysian semiconductor factory

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James T. Quintero