Market report

Market higher on troop withdrawal | wage growth outpaced


5pm: Market rises on easing tensions

UK stocks closed higher as the FTSE 100 Index was lifted by reports of troops who have been engaged in military operations close to the Ukraine border returning to their bases.

Western leaders said they were seeing positive signs that Russia was looking to ease tensions over Ukraine..

After a meeting with German Chancellor Olaf Scholz in Moscow, President Vladimir Putin said Russia “of course” did not want war, and was willing to look for solutions with the West.

“We are ready to work further together. We are ready to go down the negotiations track,” Putin told a joint press conference with Scholz, confirming a “partial pullback of troops”.

London’s blue-chip index rose 77.33 points, or just over 1%, to close at 7,608.92.

Traders hit the buy button with a vengeance this afternoon on hopes that the situation in Ukraine appears to be calming down,said Chris Beauchamp, chief market analyst at online trading platform IG.

Evraz, with key steelmaking operations in Russia, rose 4.79% to 330.2p, recovering some ground after losing a third of its value yesterday.

Oil prices fell back with Brent oil quoted at $92.50 a barrel at the equities close, down sharply from $94.70 at the close Monday.

BP and Shell lost 0.8% and 1.1% respectively, tracking spot oil prices lower.

9am: Blue chip bounce

Blue chips bounced back from yesterday’s route, with the FTSE 100 trading 55 points higher at 7,586.81 as hopes remained of a diplomatic solution to the Ukraine crisis. Some troops were said to be withdrawing from the border and sent back to their home bases.

Russia-focused steelmaker Evraz, which lost a third of its value yesterday, was up 4% at 328.6p.

Glencore rallied after saying it would pay $4bn (£3bn) to shareholders as the company reported an 84% increase in underlying earnings, boosted by soaring commodity prices.

AstraZeneca also rose after saying its cancer drug Lynparza used with a common hormone therapy prolonged the life of end-stage prostate cancer treatments compared with the current treatment.

7.15am: Labour market robust, but wage growth outpaced

Cost of living increases outpaced wage growth in the three months between October and December, officials figures show.

Wages were higher, but after inflation there was a 0.8% fall, said the Office for National Statistics.

According to the ONS, employees’ regular pay, excluding bonuses, grew by 3.7% between October and December – which is high compared with rates seen over the last decade.

However, the rising cost of food, energy and household goods has pushed inflation up by 5.4% in the 12 months to December. This means that real wage growth fell.

Despite this, the economy continued to recover strongly, with unemployment falling to 4.1% and job vacancies hitting a fresh record high.

Unemployment is now “only fractionally” above where it was before the pandemic.

Suren Thiru, head of economics, at the British Chambers of Commerce, said: “The striking increase in payroll employment in January suggests that Omicron had little effect on the UK labour market as demand for workers remained robust.”

7am: Metro Bank CFO quits

Metro Bank

Metro Bank said David Arden, chief financial officer, has agreed with the board that he will step down with immediate effect and leave the business on 1 April.

Marc Jenkins, deputy CFO, will assume responsibility for the finance function from today while the bank recruits an interim CFO; that process has commenced and a further announcement will be made in due course.  The board will comprise of 10 members until a successor is appointed.

Metro Bank’s full year results will be announced on 23 February as planned and are expected to be in line with management expectations

Daniel Frumkin, CEO said: “On behalf of the board I would like to thank David for the important work that he has done to strengthen Metro Bank’s financial controls over the past two years. He has played an instrumental role in helping to deliver the bank’s strategic priorities and turnaround plan and leaves with our best wishes for the future.”

7am: Menzies defends strategy

Menzies’ board has firmed up its defence to a proposed 510p per share offer from NAS Holdings by stating why it undervalues the business.

The board insists the proposed offer, valuing the firm at £468m, is “opportunistic, conditional and that the terms fundamentally undervalue Menzies and its future prospects.”

Full story here

Global markets

Further losses were expected across global markets amid tensions over Ukraine and potential sanctions on Russia.

The FTSE 100 closed 129 points lower at 7,531.59 – its second biggest one day fall this year.

Almost £58bn was wiped from the value of London’s top 350 companies after markets opened on Monday. However, traders clawed back some of their losses and the loss was reduced to £43bn by the time markets closed.

Shares in oil major BP were down nearly 4% because the business has a nearly 20% stake in Russian energy giant Rosneft.

Overnight on Wall Street, the Dow Jones declined 0.49%, and the S&P 500 index dropped 0.38%, the Russell 2000 dipped 0.46%, while the tech-focuses Nasdaq remained unchanged.

Germany’s DAX fell to an eight-month low.

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