Market report

FTSE plummets | Taylor Wimpey higher | Scotgold loan


5pm: Shares plummet

London’s blue chip index fell sharply as the war in Russia intensified and uncertainty grew around the global economy. The FTSE 100 closed 190.71 points lower (-2.57%) at 7,238.85.

The London Stock Exchange has 24 companies incorporated in Russia trading on the market, of which 17 are now suspended.

Diageo, Boohoo, Marks & Spencer and Ikea were among the latest firms to announce they were taking action against trading with or within Russia, though most have hedged their bets.

Danni Hewson, financial analyst at AJ Bell, said: “Suspending operations seems to be the phrase of the day with more western companies pulling back from Russia – but not pulling out.

“Whether it’s flat pack giant Ikea or high-end retailer Burberry, brands are on the march recognising three things.

“One – no brand wants to be “that company”, the only one that didn’t take a stand when public opinion is so black and white.

“Two – selling in Russia is just hard as sanctions bite and supply chains are disrupted.

“Three – there is a chance that one day doing business with Russia will no longer be bad for business and some brands are clearly thinking about the long game.

“Whatever game individual companies are playing, today has delivered pretty tough conditions on the pitch. London’s blue-chip FTSE 100 only manged to field a handful of risers, soaring commodity prices boosting Glencore, Anglo American and Rio Tinto, but you have to consider that those gains must also herald more pain for the consumer. 

ITV slumped 27.5% after the broadcaster reported a surge in annual profits and revenue but investors were concerned about its spending plans.

GKN owner Melrose fell 8.36% as it shelved a planned payout to shareholders because of concerns caused by Russia’s invasion of Ukraine, although its results did come in ahead of expectations.

Airlines suffered another battering, with BA and Iberia owner IAG down 7.05%, and low-cost carriers Wizz Air and easyJet descending 8.53% and 7.4%, respectively.

9.30am: Miller board changes

Miller Homes has announced a change of CEO and chairman from the end of this month.

Full story here

9.30am: Oil surge fails to drive market higher

The FTSE 100 was down 30 points at 7398.

“Not even continuing strength in the oil and gas market and the resulting upswing in BP and Shell shares could save the FTSE 100 from a fall on Thursday,” says AJ Bell investment director Russ Mould.

“Investor nervousness is perfectly understandable as we won’t know the full impact of the conflict sparked by Russia’s invasion of Ukraine for some time.

“However, one thing is already clear, it has supercharged the inflationary pressures already facing the globe, while at the same time blunting central banks’ response, as they will be wary of being too aggressive on rates at a time of such uncertainty.”

7am: Taylor Wimpey leaps

Taylor Wimpey said strong customer demand boosted annual revenues and profits.

The house builder reported a 53.6% jump in revenues for the year to 31 December, to £4.28bn, after total UK home completions increased 47% to 14,087.

Pre-tax profits jumped 157% to £679.6m, while the operating margin rose to 19.3% from 10.8% and the overall average selling price increased to £300,000 from £288,000.

The company also announced plans to return £150m to shareholders in 2022 via a share buyback.

7am: ITV ‘outstanding’

ITV posted a 48% rise profit before tax to £480 million for the year to the end of December (2020: £325m) on a 24% rise in revenue to £4 billion.

The board proposes a final dividend of 3.3p for the full year 2021, based on two-thirds of a notional full-year dividend of 5.0p. It intends to pay an ordinary dividend of at least 5p per annum which can grow over time.

Full story here

7am: ScotGold loan

Scotgold Resources, which operates the Scottish gold mine near Loch Lomond, has received a £250,000 loan from a company owned by non-executive director Nat le Roux.

The short term loan Facility with Bridge Barn will cover the company’s immediate working capital requirements which have been impacted by the delay in shipment of gold concentrate from port caused by the Ukraine crisis.

Production and the company’s mine optimisation plan to ramp up the production profile of its Cononish gold mine continue to progress in line with management’s expectations.

Global markets

Oil prices continued to surge higherwith Brent hitting $117, up 20% in a week, and prompting economists to warn that the global economy is heading for a stagflation shock due to the surge in commodity prices.

The price of coal, natural gas, aluminium and wheat also all surged higher as traders factored in the possibility of supplies from Russia coming to a halt.

Wall Street ended the session sharply higher on after Federal Reserve chairman Jerome Powell indicated that interest rate rises would be less aggressive than some investors were expecting.

Mr Powell’s comments, in testimony to the US House of Representatives Financial Services Committee, helped calm investors after Russia’s invasion of Ukraine sent markets into a tailspin.

He said he is inclined to support a 25 basis point rate hike in March, quelling some concerns about the potential for a bigger hike.

The Dow Jones Industrial Average rose 1.79%, while the S&P 500 gained 1.86% and the Nasdaq Composite climbed 1.62%.

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