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Putin intervention eases pressure on equities

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5pm: Putin eases pressure on markets

The FTSE 100 index closed lower, but off its weakest level after Russian president Vladimir Putin said the country would increase the amount of gas it will send to Ukraine via Europe.

Following Mr Putin’s comments on supplies, gas prices dropped to about 257p a therm later on Wednesday.

The high cost of wholesale gas has seen several UK energy firms collapse and halted production across industries.

The fall in oil and gas prices contributed to market weakness. 

Brent oil also retreated from three-year highs, trading at $81.12 a barrel at the equities close, down from $82.87 at the close Tuesday. The North Sea benchmark touched a fresh three-year high of $83.57 in early trade.

At the close, the UK blue-chip index was 81 points, or 1.15% lower at 6,996, above the session low of 6,946.

Tesco ended the best performer, up 5.9% or 15.05p at 267.82p, after the supermarket chain lifted its annual outlook and set out plans for a £500 million buyback (see below).

The more UK company focused FTSE 250 shed 344 points, or 1.51% to 22,387.


9am: London tumbles

Equities took a fall in the first hour of trading on the LSE as traders look ahead to US job figures on Friday.

The FTSE 100 index was down 70.65 points, or 1.0%, at 7,006.45 reversing all of Tuesday’s rise.

Good figures and a share buyback from Tesco (see below) saw its stock surge 5% to help the wider market avoid a steeper decline. Sainsbury’s rose 1.1% in a positive read-across.


7am: Tesco raises targets

Tesco

Tesco raised its targets after posting half-year adjusted operating profit up by 41%.

This reflected sustained strong UK sales, a reduction in COVID-19 related costs in the retail businesses, and a return to profitability in Tesco Bank.

Full story here


Global markets

Asian shares reversed early gains after an overnight rebound in the US, while oil remained near new highs.

The gains in oil are driven by concerns about energy supply, and come two days after the OPEC+ group of producers stuck to its plans for output.

Brent crude slipped 0.08% to $82.49 per barrel, having hit a three-year high in the previous session. US crude pared gains and was 0.09% lower at $78.87 a barrel, though it is at its highest level since 2014.

In equity markets. Japan’s Nikkei lost 0.78% because of worries about China’s real estate market. There were falls in Hong Kong, off 1%, Korea down 0.9% and Australia down 0.45%.

Chinese markets remained closed for a public holiday, and shares of cash-strapped Chinese developer China Evergrande were suspended, pending an announcement of a significant transaction.

Wall Street closed higher on the back of a strong rebound in growth stocks.

Apple, Microsoft, Amazon and Google owner Alphabet, Wall Street’s most valuable companies, rose after a bout of selling in growth stocks on Monday.

Facebook rebounded after taking a beating when its app and photo-sharing platform Instagram went offline for hours.

The S&P 500 gained 1.05%, while the Nasdaq Composite was 1.25% higher and the Dow Jones Industrial Average rose 0.93%.



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