- FTSE 100 claws back losses after Putin calls forces back
- Tensions still high between Russia, Ukraine
- Ashtead and Glencore Xstrata impress with results
- Fresnillo drops sharply as profits fall
techMARK 2,901.94 +1.74%
FTSE 100 6,811.16 +1.53%
FTSE 250 16,629.45 +1.55%
UK stocks on Tuesday had erased all of the prior day's losses as sentiment recovered after tensions between Ukraine and Russia dragged markets to a two-week low.
London's FTSE 100 benchmark index was trading 1.5% higher at 6,811 by midday. The Footsie fell 1.5% to 6,708.35 on Monday, finishing at its lowest closing price since February 14th.
The recovery came after Russian President Vladimir Putin ordered forces "involved in military exercises" to return to their bases. This followed a backlash from international leaders after Russia's increased military presence near the border of Ukraine.
In a later press conference the Russian leader said troops would only be sent into neighbouring Ukraine under extreme circumstances and in observance of international law, adding that he does not seek to annex Crimea to Russia. That led to another move higher in risk assets.
"One thing is for sure, the rest of the week won't be for the faint hearted, and investors will likely have to sift their way through waves of breaking news and rumours that will guide the markets for the next few days," said Toby Morris, Senior Sales Trader at CMC Markets.
Concerns are still high with 16,000 Russian troops deployed in the Crimea region in the aftermath of deadly protests last month and the ousting of pro-Russian Ukrainian President Viktor Yanukovych, who has since fled to Russia.
The intervention had been condemned by the G7 who labelled it as a "violation of Ukraine's sovereignty", prompting calls for potential trade sanctions and visa restrictions against Russia in retaliation.
ECB meeting in focus
Meanwhile, investors were beginning to look ahead to the European Central Bank (ECB) meeting later this week, in which policymakers could act to quell rising deflation risks.
"A marked dip in producer prices in January will do little to ease concerns over persistently very low Eurozone inflation and maintains pressure for ECB action at its March 6th policy meeting," according to Howard Archer, Chief European and UK economist at IHS Global Insight.
However, analysts at Bank of America Merrill Lynch believe that the ECB is likely to hold fire until later meetings: "In our view, the ECB is not ready to fire a 'bazooka' in this week's meeting, despite very low inflation and rising deflation risks.
"[...] Looking ahead, we believe that the ECB is not worried about deflationary risks yet. However, the ECB might be pushed into action at the April meeting, or this summer, if inflation falls further," they said.
Ashtead, Glencore Xstrata provide a lift
Equipment rental business Ashtead surged after reporting a bumper set of third-quarter earnings, driven by a strong performance from its two main divisions. The group now expects full-year results to come in ahead of previous expectations.
Mining group and trading house Glencore Xstrata also rose after beating forecasts comfortably with its 2013 results. Adjusted operating profits were more or less flat at $13.1bn but well ahead of the $12.3bn expected by analysts.
Leading the downside was precious metal producer Fresnillo which slumped after it reported a worse-than-expected 64% drop in 2013 profits, reflecting a decline in gold production and a fall in precious metal prices.
The stock, along with sector peer Randgold, was also pulling back after a strong performance on Monday as a reduction in risk appetite pushed investors towards safe-haven assets such as gold and silver.
Oil major BP was subdued after a US court rejected calls to prevent certain compensation payments related the Deepwater Horizon oil spill. BP released a statement yesterday saying it disagrees with the decision.
Postal group Royal Mail was lower after Credit Suisse initiated coverage of the stock with an 'underperform' rating, saying that the valuation is "stretched" after recent share-price strength.
Sports media group Perform surged on turnaround hopes following a 7% fall in earnings per share in 2013. The company said the board was taking the opportunity to address the large cost base and had "already put in place a series of plans and initiatives".
Sausage skins firm Devro fell sharply after its annual revenue was broadly flat, reflecting weak demand.
FTSE 100 - Risers
Ashtead Group (AHT) 926.50p +9.52%
Coca-Cola HBC AG (CDI) (CCH) 1,495.00p +3.68%
William Hill (WMH) 390.80p +3.25%
ITV (ITV) 202.00p +3.01%
Shire Plc (SHP) 3,390.00p +2.82%
Meggitt (MGGT) 508.50p +2.75%
easyJet (EZJ) 1,721.00p +2.75%
Melrose Industries (MRO) 327.20p +2.73%
Intertek Group (ITRK) 3,050.00p +2.69%
Travis Perkins (TPK) 1,955.00p +2.68%
FTSE 100 - Fallers
Fresnillo (FRES) 882.00p -9.07%
Randgold Resources Ltd. (RRS) 4,904.00p -0.99%
Royal Mail (RMG) 592.50p -0.25%
FTSE 250 - Risers
Perform Group (PER) 273.00p +17.42%
Bank of Georgia Holdings (BGEO) 2,287.00p +11.56%
Pace (PIC) 436.90p +8.25%
CSR (CSR) 804.00p +7.27%
Rotork (ROR) 2,817.00p +6.62%
IP Group (IPO) 218.00p +5.77%
Greencore Group (GNC) 274.20p +5.18%
Evraz (EVR) 64.30p +5.15%
Alent (ALNT) 320.50p +4.88%
Redrow (RDW) 335.80p +4.64%
FTSE 250 - Fallers
Devro (DVO) 277.90p -8.89%
Xaar (XAR) 1,034.00p -1.34%
African Barrick Gold (ABG) 291.40p -1.32%
Daejan Holdings (DJAN) 4,968.00p -0.94%
Regus (RGU) 228.10p -0.87%
Amlin (AML) 458.80p -0.78%
Henderson Group (HGG) 240.00p -0.62%
Tullett Prebon (TLPR) 325.90p -0.49%
UK Commercial Property Trust (UKCM) 78.80p -0.38%
Atkins (WS) (ATK) 1,447.00p -0.34%