London midday: FTSE plunges, oil above $100 as Russia invades Ukraine
London’s equity markets were a sea of red by midday on Thursday after Russia invaded Ukraine, with oil and gold both sharply higher.
The FTSE 100 was down 3.1% at 7,263.38, extending earlier losses, while Brent crude topped $103 a barrel.
Russ Mould, investment director at AJ Bell, said: "The surge in the oil price is terrible news for businesses and consumers, and fundamentally this clarifies one of the key impacts of the Russia/Ukraine war - it will serve to further stoke inflation.
"Not only will energy bills keep going up, but food prices look set to jump even higher. Ukraine and Russia are both big food suppliers and any disruption to supplies will force buyers to seek alternative sources, which could jack up prices.
"Investor sentiment was already fragile because of rising inflation and the upwards direction of travel for interest rates, but confirmation of war and the associated alarming news headlines around the world are likely to see equity markets go through a difficult period for longer than people might have previously expected."
Unsurprisingly, Russian steelmaker Evraz - whose largest shareholder is Russian billionaire Roman Abramovich - and Anglo-Russian precious metals miner Polymetal tanked.
Rolls-Royce was under the cosh after the engine maker said chief executive Warren East would leave at the end of 2022 and that it swung to an annual operating profit. Russ Mould said investors were reacting badly to news of East’s departure.
"East has been at the helm of Rolls-Royce for a comparatively long time and while progress may have been slower than the market may have liked, the credentials he built up at former market star ARM meant he was given the benefit of the doubt in a slow rehabilitation of the business.
"Rolls-Royce was in a very tricky spot when he took over, with a string of damaging profit warnings in the early 2010s and a serious cash flow problem.
"It has been pretty turbulent under East too, though in part that reflects a global pandemic which had a disastrous impact on Rolls-Royce’s aviation sector clients.
"It doesn’t help that today’s results offer a less than winning legacy. The company has missed on earnings and margin guidance for 2022 is dismal looking."
Lloyds Banking Group also slid amid concerns about the outlook, after the bank announced a £2bn share buyback as rising revenue supported higher annual profit.
Travel stocks were under pressure amid worries about the impact of the Ukraine crisis, with BA and Iberia owner IAG, Wizz, easyjet, Carnival and Tui all lower. Budget airline Wizz said earlier that it has halted flights to and from Ukraine.
On the upside, precious metals miners Fresnillo, Hochschild and Centamin all shone, with gold prices above $1,940 an ounce as investors piled into safe haven assets.
BAE Systems also gained after it reported a rise in full-year earnings and struck an upbeat note on the outlook. It probably didn’t hurt that’s it a defence company.
Anglo American rose after the miner posted a jump in full-year profit thanks to strong demand and prices.
Market Movers
FTSE 100 (UKX) 7,263.38 -3.13%
FTSE 250 (MCX) 20,124.69 -3.44%
techMARK (TASX) 4,195.41 -3.05%
FTSE 100 - Risers
Fresnillo (FRES) 735.00p 6.80%
BAE Systems (BA.) 631.80p 5.16%
Anglo American (AAL) 3,628.00p 2.70%
Shell (SHEL) 1,991.60p 2.49%
Dechra Pharmaceuticals (DPH) 3,834.00p 0.05%
Glencore (GLEN) 425.25p -0.49%
Meggitt (MGGT) 742.40p -0.75%
Rio Tinto (RIO) 5,519.00p -0.88%
United Utilities Group (UU.) 1,034.50p -1.10%
Ferguson (FERG) 11,145.00p -1.15%
FTSE 100 - Fallers
Polymetal International (POLY) 699.40p -36.27%
Evraz (EVR) 179.90p -26.87%
Rolls-Royce Holdings (RR.) 97.47p -17.19%
Lloyds Banking Group (LLOY) 47.30p -9.40%
Hikma Pharmaceuticals (HIK) 1,838.00p -8.69%
St James's Place (STJ) 1,361.50p -7.91%
Melrose Industries (MRO) 140.95p -7.91%
WPP (WPP) 1,085.00p -7.78%
Abrdn (ABDN) 205.80p -7.59%
International Consolidated Airlines Group SA (CDI) (IAG) 145.26p -7.49%
FTSE 250 - Risers
Hochschild Mining (HOC) 111.90p 10.03%
Centamin (DI) (CEY) 101.80p 5.56%
Energean (ENOG) 1,010.00p 5.21%
Endeavour Mining (EDV) 1,985.00p 5.03%
Morgan Sindall Group (MGNS) 2,255.00p 4.88%
Harbour Energy (HBR) 369.00p 4.59%
Howden Joinery Group (HWDN) 748.60p 2.44%
Capricorn Energy (CNE) 211.00p 1.74%
Greencoat UK Wind (UKW) 141.80p 1.00%
Capital Gearing Trust (CGT) 4,980.00p 0.91%
FTSE 250 - Fallers
Ferrexpo (FXPO) 172.50p -30.39%
Petropavlovsk (POG) 10.49p -23.43%
Wizz Air Holdings (WIZZ) 3,148.00p -13.61%
Provident Financial (PFG) 284.00p -8.62%
Aston Martin Lagonda Global Holdings (AML) 921.00p -8.13%
Spectris (SXS) 2,989.00p -7.80%
Carnival (CCL) 1,309.80p -7.64%
easyJet (EZJ) 598.00p -7.49%
Network International Holdings (NETW) 202.60p -7.32%
TUI AG Reg Shs (DI) (TUI) 230.40p -7.25%