London opening: Shares fall forward of Russia-Ukraine talks, ECB announcement

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London shares fell in early trading on Thursday after sharp gains in the previous session, as investors eyed high-level talks between Russia and Ukraine and the European Central Bank’s latest policy announcement.

At 0845 GMT, the FTSE 100 was down 0.8% to 7,130.22.

Foreign ministers from Russia and Ukraine will hold talks in Turkey later in the day in what will be the first high-level meeting between the two sides.

Danske Bank said in a statement that it does not expect the Russia-Ukraine conflict to spread to other countries and that commodity prices will generally soften over the next six months.

“We expect that the Ukrainian and Russian leaders will eventually agree on a ceasefire. We also believe that without direct Western/NATO military intervention, the Ukrainian government will be forced to make painful concessions,” it said.

“In our main scenario, we believe that despite a possible ceasefire, some level of conflict will remain in Ukraine and there will be uncertainty, but the war will not spread to other countries in Europe. In any case, we do not expect any sanctions against Ukraine. Russia is to be deposed in the foreseeable future. On the contrary, the West still has leeway to tighten sanctions.

“Commodity prices have skyrocketed since the start of the war. In our view, prices are out of sync with fundamentals and we expect a gradual normalization as the market learns to cope with the new situation.”

Geopolitics aside, investors kept their eyes on the latest ECB monetary policy announcement due at 1245 GMT and US inflation data at 1330 GMT. Danske said: “We expect the ECB to continue on its way towards a ‘neutral’ monetary policy calibration and formally set an end date for the APP program (September this year) due to high inflationary pressures, but not give a clear indication of one forthcoming rate hike.”

On the stock markets Rio Tinto, persimmon, HSBC and micro focus were all weaker as they traded with no dividend entitlement.

On the upper side the Anglo-Russian prospector for precious metals polymetal was the top gainer in the FTSE 100

engineering group Spirax Sarco was also a climber after projected strong growth in 2022 as it reported a sharp rise in full-year profit and increased its dividend.

Hill & Smith, Spirent communication, evolution and head were all on their feet after the results.

In the broker change action Capital & Counties was higher following an upgrade to “overweight” in Barclays.

market mover

FTSE 100 (UKX) 7.130.22 -0.84%
FTSE 250 (MCX) 20.069.19 0.00%
techMARK (TASX) 4,159.72 -0.30%

FTSE 100 – risers

Polymetal International (POLY) 169.30p 8.73%
Antofagasta (ANTO) 1,533.50p 2.37%
Spirax-Sarco Engineering (SPX) 11,555.00 p.p 2.03%
Glencore (GLEN) 477.95 p 1.67%
Evraz (EVR) 94.00p 1.58%
Hikma Pharmaceuticals (HIK) 1,988.00p 1.53%
Taylor Wimpey (TW.) 135.35p 1.23%
Airtel Africa (AAF) 139.10p 1.09%
Barratt Developments (BDEV) 554.40 p 1.06%
Compass Group (CPG) 1,642.00p 0.74%

FTSE 100 – Faller

Rio Tinto (RIO) 5,446.00p -6.38%
Persimmon (PSN) 2,201.00p -5.74%
HSBC Holdings (HSBA) 470.25p -3.83%
CRH (CDI) (CRH) 3,090.00 p.p -3.77%
Burberry Group (BRBY) 1,608.00p -2.63%
Coca-Cola HBC AG (CDI) (CCH) 1,565.00 p.p -2.19%
Rolls Royce Holdings (RR.) 92.36p -2.14%
Abrdn (ABDN) 187.30p -1.81%
Legal and General Group (LGEN) 255.20p -1.81%
Intermediate Capital Group (ICP) 1,520.50p -1.78%

FTSE 250 – risers

Hill & Smith Holdings (HILS) 1,416.00p 9.43%
Head (VPI) 11:35 p.m 6.77%
Spirent Communications (SPT) 239.20 p 6.12%
Molten Ventures (Grow) 714.00p 4.23%
Evolution Group (FAN) 481.00p 3.78%
National Express Group (NEX) 250.80p 3.72%
Moonpig Group (MOON) 221.80p 3.36%
Capital & Counties Properties (CAPC) 160.50p 3.35%
Ferrexpo (FXPO) 145.70 p 3.33%
Network International Holdings (NETW) 201.80p 3.28%

FTSE 250 – Faller

Micro Focus International (MCRO) 352.90p -4.47%
Dark Track (DARK) 473.20p -3.39%
Oxford Biomedica (OXB) 664.00p -2.64%
Quilters (QLT) 129.00 p.p -2.49%
888 holdings (888) 184.70p -2.38%
SDCL Energy Efficiency Income Trust (SEIT) 114.50 p -2.14%
Wizz Air Holdings (WIZZ) 2,851.00p -1.99%
Oxford Instruments (OXIG) 1,876.00p -1.88%
Brewin Dolphin Holdings (BRW) 280.00 p.p -1.75%
Law Debenture Corp. (LWDB) 757.00p -1.69%