Some well-received corporate earnings saw the FTSE 100 on Tuesday cautiously recoup some recent losses, but a sustained rebound seemed unlikely with Russia facing international fury over its move into eastern Ukraine.
The FTSE 100 index closed down 9.88 points, or 0.1%, at 7,494.21. The FTSE 250 ended down 103.86 points or 0.5%, at 20,993.33, and the AIM All-Share closed down 9.91 points, or 1.0%, at 1,031.62.
In European equities on Tuesday, the CAC 40 in Paris ended flat and the DAX 40 in Frankfurt ended down 0.3%.
European stock markets were mixed on Tuesday as Russia faced a furious global diplomatic and economic backlash after President Vladimir Putin ordered his forces into Ukraine to secure two breakaway regions.
Germany announced it was halting certification of the Nord Stream 2 gas pipeline from Russia and said the EU would adopt ‘robust and massive’ economic sanctions.
The White House welcomed Germany’s decision on the pipeline and said it would reveal its own measures later. Britain slapped sanctions on five Russian banks and three billionaires.
World powers are still trying to decide whether Putin’s deployment of so-called ‘peacekeepers’ constitutes the feared invasion they warned would trigger potentially crippling sanctions.
This allowed Russia-focused firms recently hit by worries over sanctions to rebound on Tuesday. Evraz rose 5.4% and Polymetal International advanced 2.8%.
Reopening from a holiday, stocks in New York were catching up with Monday’s global equity declines. The Dow Jones was down 0.9%, the S&P 500 index down 0.7%, and the Nasdaq Composite down 1.0%.
Unable to lift the mood was survey data showing business activity in the US hit a two-month high in February as the country bounced back from Covid-19 disruption at the start of the year.
The flash composite output index for February rose to 56.0 points from 51.1 in January. As any reading over the no-change mark of 50.0 indicates expansion, the latest figure signals growth accelerated sharply in February.
This was driven by a significant uptick in the services business activity index to 56.7 from 51.2 in January. The manufacturing purchasing managers’ index also improved notably, coming in at 57.5 from 55.5 in January.
The dollar was mostly higher against major currency pairings as investors remained cautious. The pound was quoted at $1.3595 at the London equities close Tuesday, down compared to $1.3607 at the close on Monday. Against the yen, the dollar was trading at JPY114.94, up compared to JPY114.83 late Monday.
The German business climate improved again in February, survey data showed, despite the aggravation of the crisis in Ukraine and persistent supply chain issues. The Ifo institute’s closely watched indicator rose to 98.9 points from 96.0 in January, with companies reporting an improvement in their expectations for the near future.
Safe haven gold rose to $1,900.36 an ounce at the London equities close Tuesday against $1,896.42 at the close on Monday.
Brent oil was quoted at $96.70 a barrel at the London equities close Tuesday, up from $95.19 late Monday.
Back in London, Smith & Nephew topped the FTSE 100, rising 7.5%, after the medical technology firm reported a rise in annual profit on improved trading and revenue growth in three of its global franchises, and also appointed a new chief executive.
The Watford, England-based company posted pre-tax profit of $586 million for 2021, more than doubled from $246 million in 2020. Trading profit was $936 million, up 37% from $683 million in 2020, on revenue of $5.21 billion, up 14% from $4.56 billion.
The company has appointed Deepak Nath as its new CEO, succeeding Roland Diggelmann, who will step down by mutual agreement. Nath will take up the role on April 1 and Diggelmann will leave on March 31. Nath joins Smith & Nephew from German medical device company Siemens Healthineers, where he was president of the Diagnostics business segment.
InterContinental Hotels Group rose 4.2% amid a swing to annual profit thanks to ‘significantly’ improved trading conditions in 2021, leading the company to reinstate shareholder payouts.
For 2021, IHG swung to a pre-tax profit of $361 million from a loss of $280 million in 2020 on total revenue that was up 21% to $2.91 billion from $2.39 billion. It stated that more travel demand returned as vaccines rolled out, government-mandated restrictions eased and economic activity started to rebuild.
IHG declared a total dividend of 85.9 US cents for 2021, having paid out nothing the year before.
Investment platform Hargreaves Lansdown slumped 16% on a sharp drop in profit in the first half as client activity was ‘calmer’, while setting out its investment plans for the next five years.
Coca-Cola HBC fell 5.5% despite raising its annual payout following a double digit rise in profit and revenue as a result of higher volumes and pricing following ‘effective execution’ in a volatile environment.
For 2021, Coca-Cola HBC posted a pre-tax profit of €734.9 million, up 23% from €593.9 million the year before. This was on net sales revenue which grew 17% year-on-year to €7.17 billion from €6.13 billion, and coming above consensus expectations of €7.07 billion.
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.
The consulting and engineering firm said $20 million of that will be in cash to complete the Aegis Poland project, with the rest being non-cash charges for ‘expected recovery from the customer and the legal costs needed to achieve such recovery’.
However, the company said that its underlying results for 2021 and outlook for 2022 remain unchanged from the trading update it provided in January.
The UK corporate calendar on Wednesday has full-year results from lender Barclays, miner Rio Tinto and luxury car maker Aston Martin.
In Wednesday’s economic calendar, there is Gfk German consumer confidence at 0700 GMT and Eurozone inflation at 1000 GMT. Financial markets in Japan will be shut for the Emperor’s Birthday holiday.
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