London close: Stocks lower amid Ukraine, global growth concerns

Tue 19 Apr 2022

LONDON (SHARECAST) - (Sharecast News) - London stocks closed in negative territory on Tuesday, as Russia's latest assault on Ukraine and hawkish Federal Reserve comments worried investors.

The FTSE 100 ended the session down 0.2% at 7,601.28, and the FTSE 250 was off 0.75% at 20,962.17.

Sterling was also in the red, last trading down 0.09% on the dollar at $1.3007, and weakening 0.17% against the euro to change hands at €1.2055.

"European markets have got off to a lacklustre start to the week, pulling off their lows of the day, despite the IMF following the World Bank yesterday in downgrading its outlook for the global economy," said CMC Markets chief market analyst Michael Hewson.

"This morning's initial weakness has given way to a slightly more resilient tone, as today's sharp decline in oil prices offsets concerns that the start of a renewed Russian offensive on the Donbass region could increase the pressure on the EU to look at a complete embargo on Russian oil and gas."

In economic news, retail footfall rose in the lead up to Easter as consumers got a chunk of shopping in ahead of the long weekend, according to retail experts Springboard.

Footfall rose 15% week-on-week during the period from Monday to Thursday leading up to the four-day break, with a rise of 21.9% on Thursday and 27.3% in UK high streets.

However, footfall dropped marginally by 0.1% over the weekend from the weekend before over Friday, Saturday, and Monday, while UK footfall over Easter remained 13% below 2019.

Footfall across UK retail destinations rose 5.8% on Good Friday from the week before, with footfall in coastal towns up an impressive 33.6% and UK high street footfall rising 10% on Good Friday.

In historic towns footfall rose by 15.8%, while central London was up 14.3% and large UK city centres saw a 14.5% increase on the first day of the long weekend break.

"Two factors heavily influenced footfall activity in UK retail destinations over Easter this year - the first factor was the warm and sunny weather, and the second factor was that this the first Easter bank holiday weekend since 2019 with no Covid restrictions," said Diane Wehrle, Springboard's insights director.

"The fact that this Easter was the first since 2019 with no restrictions was likely a factor in people making trips to retail destinations in advance of Easter, rather than on the weekend itself.

"Over the period from Monday to Thursday leading up to Easter footfall rose from the week before by an average of 15%, with a rise of 21.9% on Thursday and 27.3% in UK high streets."

Elsewhere, the International Monetary Fund slashed its forecasts for global gross domestic product growth to 3.6% for both 2022 and 2023, as commodity markets, trade and financial linkages amplified the ills of the war in Ukraine.

Previously, the IMF had anticipated GDP growth of 4.4% and 3.8% for those two years, respectively.

According to the IMF's chief economist, Pierre-Olivier Gourinchas, "global economic prospects have been severely set back, largely because of Russia's invasion of Ukraine."

Gourinchas also called attention to the risk of "a more permanent fragmentation" of the world economy into geopolitical blocks.

"Such a tectonic shift would cause long-run efficiency losses, increase volatility and represent a major challenge to the rules-based framework that has governed international and economic relations for the last 75 years," he added.

Sentiment was dented earlier in the session after Russian forces launched their long-expected offensive in the east of Ukraine overnight, after massing troops and artillery there for the past two weeks.

Investors were also digesting comments from St Louis Federal Reserve Bank President James Bullard, who repeated his case for increasing interest rates to 3.5% by the end of the year on Monday, saying domestic inflation was "far too high".

In equity news, gains in commodity stocks kept losses in check, boosted by higher metal prices on the back of hopes of more stimulus in China.

Oil majors BP and Shell remained in the green, by 0.4% and 1.64% respectively, after JP Morgan raised its price targets on the companies' shares.

Spectris was ahead 4.65% after the electrical engineering firm said it will sell specialist sensor maker Omega Engineering to private equity firm Arcline Investment Management for $525m and also started a £300m share buyback.

Banks were in the green on the back of the continuing rise in US bond yields, with NatWest Group up 0.64%, HSBC ahead 0.61%, and Lloyds Banking Group managing gains of 0.84%.

On the downside, shares in travel food outlet operator SSP Group were down 6.34% after Deutsche Bank downgraded the company's shares to "hold" from "buy".

Eastern Europe-focussed low-cost carrier Wizz Air descended 5.36% after Russia launched its offensive in eastern Ukraine.

JTC tumbled 12.08%, even after it posted a higher full-year pretax profit, alongside a bigger dividend and sounded an upbeat note on the outlook.

Market Movers

FTSE 100 (UKX) 7,601.28 -0.20%
FTSE 250 (MCX) 20,962.17 -0.75%
techMARK (TASX) 4,408.23 -0.07%

FTSE 100 - Risers

Smith & Nephew (SN.) 1,234.00p 3.31%
Royal Mail (RMG) 338.50p 2.86%
Ferguson (FERG) 10,250.00p 2.30%
Rolls-Royce Holdings (RR.) 95.50p 2.22%
Smurfit Kappa Group (CDI) (SKG) 3,201.00p 2.01%
Glencore (GLEN) 535.60p 1.67%
Shell (SHEL) 2,228.00p 1.64%
Tesco (TSCO) 270.30p 1.50%
Entain (ENT) 1,575.00p 1.45%
Smiths Group (SMIN) 1,453.50p 1.36%

FTSE 100 - Fallers

Intermediate Capital Group (ICP) 1,614.50p -4.55%
ITV (ITV) 74.24p -3.61%
Informa (INF) 597.40p -3.36%
JD Sports Fashion (JD.) 143.05p -3.02%
Rentokil Initial (RTO) 514.00p -2.80%
Intertek Group (ITRK) 4,943.00p -2.74%
Diageo (DGE) 3,867.50p -2.42%
London Stock Exchange Group (LSEG) 7,960.00p -2.33%
Croda International (CRDA) 7,418.00p -2.32%
Abrdn (ABDN) 193.20p -2.25%

FTSE 250 - Risers

Darktrace (DARK) 384.20p 5.29%
Spectris (SXS) 2,640.00p 4.65%
Wood Group (John) (WG.) 192.45p 4.06%
Weir Group (WEIR) 1,575.00p 2.81%
Morgan Advanced Materials (MGAM) 299.00p 2.75%
QinetiQ Group (QQ.) 337.40p 2.74%
Discoverie Group (DSCV) 826.00p 2.61%
Biffa (BIFF) 339.20p 2.42%
Harbour Energy (HBR) 530.00p 2.04%
TI Fluid Systems (TIFS) 165.40p 1.97%

FTSE 250 - Fallers

JTC (JTC) 713.00p -12.08%
SSP Group (SSPG) 229.10p -6.34%
Polymetal International (POLY) 240.00p -5.62%
Syncona Limited NPV (SYNC) 163.80p -5.54%
Ferrexpo (FXPO) 181.70p -5.51%
Wizz Air Holdings (WIZZ) 2,949.00p -5.36%
Provident Financial (PFG) 261.00p -5.09%
IWG (IWG) 257.00p -4.35%
CMC Markets (CMCX) 275.00p -4.35%
AJ Bell (AJB) 285.00p -3.72%
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