UK and European stocks rise as allies tighten grip on Russia

As Western allies tighten the noose with new financial sanctions on Russia, stocks are also feeling the pinch – Photo: Shutterstock

European stocks rallied on Friday morning, ending the week on a slightly higher note as investors took comfort in the prospect of heavy economic and financial sanctions being imposed on Russia. This raised hopes that the Ukrainian situation could still be salvaged, despite the recent Russian invasion.

British stocks reflected a similar upbeat sentiment, as several sanctions against Russian companies and individuals in London are set to be implemented to limit the amount of capital companies can raise. It will also impact the amount of funds Russian citizens can deposit in UK banks within a given time frame.

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

What is interesting today: Rightmove said its profits had reached pre-pandemic levels and the company reassured investors that sales should hold up, despite inflation and rising costs of living fueling lingering concerns over the pandemic. of slowing down.

Why are stocks up today?

Investors anticipate Western sanctions on Russia: Investor confidence was boosted on Friday by several Western allies who strongly criticized Russia with punitive economic and financial measures.

  • What does that mean: Although Russia maintains that it had no intention of invading Ukraine, its recent blatantly hostile actions have shocked the world. Many hailed the escalating crisis as the worst conflict in modern times since World War II.

    The UK, US and a number of other Western allies have come together to present a united front on the use of sanctions against Russia. This includes economic and financial measures against Russian companies and individuals. Investors are therefore cautiously hoping that these measures could force Russia to retreat and adopt a more diplomatic approach.

Stock markets: highlights

  • The FTSE 100 (UK100) index edged up 2.01% to 7,352.5 basis points (bps).
  • The Euro Stoxx 50 (EU50) index climbed 1.40% to 3,882.8 bps.
  • The German DAX index (DE40) edged up 1.30% to 14,234.1 basis points.
  • The French CAC 40 index (FR40) rose 1.49% to 6,618.0 basis points.
  • The leading sectors in the UK were mining services and consumer services, while transport and technology services lagged.
  • U.S. S&P 500 futures fell 0.78% to $4,278.5.

Market sentiment

  • The Chicago Board Options Exchange (CBOE) Volatility Index, or VIX (VIX), a measure of expected swings in US stocks, fell to 29.87 basis points.
  • The US Dollar Index (DXY) fell to $97.22.
  • The US 10-year bond yield index edged up 2.014%.

Main buyers: United Kingdom and Europe

  • The main equity gainers in the UK were Evraz (EVRgb), Pearson (PSON) and Polymetal International (POLY).
  • Shares of Evraz rose after the company reported pretax profit of about $4.18 billion.
  • Pearson shares rallied after the company reported revenue growth of about 19% over the past year.
  • Shares of Polymetal International rose slightly after the company assured its shareholders that targeted sanctions against it were not very likely.
  • The best performing companies in Europe were Diageo (DGE), Prudential (PRU) and AstraZeneca (AZNs).
  • Diageo shares edged higher after the company recently launched a barley project.
  • Shares of Prudential rose slightly after the company decided to base its next CEO out of Asia.
  • AstraZeneca shares soared after the success of their breast cancer trials.

Main losers in equities: UK and Europe

  • The worst performing companies in the UK were International Consolidated Airlines Group (IAG) and Avast (AVST).
  • Shares of International Consolidated Airlines Group fell after the company announced it expected an operating loss in the first quarter of the year.
  • Avast shares fell after the company released its annual results for the past year.
  • The main equity losers in Europe were Adidas (ADSGN), L’Oreal (OR) and ASML Holding NV (ASML).
  • L’Oreal shares fell slightly after the company filed trademarks for virtual cosmetics
  • Shares of ASML NV fell after the company announced it was looking for alternatives to neon gas following the Ukraine crisis.

Read more

James T. Quintero