Market report

PM imposes sanctions on Russia, markets ease back

Vladimir Putin
Vladimir Putin: testing the west’s resolve

Prime Minister Boris Johnson has imposed sanctions on five Russian banks and three wealthy individuals, as part of the “first tranche” of sanctions against the country following its movement of troops into two breakaway Ukrainian regions.

Mr Johnson told MPs in the Commons: “Today, the UK is sanctioning the following five Russian banks: Rossiya, IS Bank, General Bank, Promsvyazbank and the Black Sea Bank. And we are sanctioning three very high-net-worth individuals: Gennady Timchenko, Boris Rotenberg, and Igor Rotenberg.”

He added: “Any assets they hold in the UK will be frozen, the individuals concerned will be banned from travelling here and we will prohibit all UK individuals and entities from having any dealings with them.”

Mr Johnson ‘saluted’ German Chancellor Olaf Scholz for refusing to certify the Nord Stream 2 gas pipeline from Russia. 

He insisted there will be moves to prevent Russian businesses trading in dollars and pounds and from raising finance in London. Western companies are likely to be banned from selling technology and infrastructure for the oil and gas sector to Russia.

Mr Johnson also made clear he backs stopping the Champions League football final being held in St Petersburg this year. UEFA said it is keeping the situation under review.

Brent oil was quoted at $96.70 a barrel at the London equities close, after hitting $99, from $95.19 late Monday.

Global stock markets clawed back heavy losses early in the session as investors held on to hopes that Russia’s deployment of troops to two breakaway regions in eastern Ukraine will be as far Moscow goes.

After a three-digit fall at the open, the FTSE 100 moved into positive territory before closing up 9.88 points at at 7,494.21.

However, Wall Street recorded losses as investors returned from Monday’s holiday. At the close the Dow Jones Industrial Average was down 1.42%, while the S&P 500 was 1.01% softer and the Nasdaq Composite saw out the session 1.23% weaker.

Other market news

In London, Smith & Nephew topped the index, rising 7.5%, after the medical technology firm reported a rise in annual profit on improved trading and revenue growth. InterContinental Hotels Group rose 4.2% following a swing to annual profit.

Mid-cap John Wood tumbled 16% as it warned it will take a $100 million exceptional charge against 2021 results, related to a project that came with its acquisition of Amec Foster Wheeler..

HSBC reported a doubling of profit in 2021, with all of the bank’s regions recording a positive year.

Pretax profit came in at $18.91 billion from $8.78bn in 2020, but below market forecasts of $19.12 billion. Annual revenue slipped to $49.55 billion from $50.43 billion. 

HSBC’s net interest margin in 2021 worsened to 1.20% from 1.32% in 2020 – which was in line with market forecasts.

The stock was down 3.1% in Hong Kong.

Elsewhere in the economy, the UK has recorded its first monthly budget surplus since the Covid pandemic began.

Public sector net borrowing showed a £2.9bn surplus, and although this was less than the £3.5bn that economists had been expected, it was still the first positive month for the public finances since January 2020.

The numbers benefited from higher than expected income tax and PAYE receipts as the labour market recovered from the pandemic.

Whilst welcoming the figures, chancellor Rishi Sunak said: “Our debt has increased substantially and there are further pressures on the public finances, including from rising inflation.”

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