Stocks in London were wavering on Wednesday after Russia’s claims of pulling troops from the Ukrainian borders was questioned by NATO - which, in turn, sent oil prices higher.
NATO chief Jens Stoltenberg indicated that major questions persist about Russia’s announcement Tuesday that it was pulling troops back from the Ukrainian border.
‘It remains to be seen whether there is a Russian withdrawal,’ Stoltenberg said.
The FTSE 100 index closed down 5.14 points, or 0.1%, at 7,603.78. The mid-cap FTSE 250 index ended down 23.57 points, or 0.1%, at 21,828.94. The AIM All-Share index ended up 0.62 of a point at 1,079.17.
The Cboe UK 100 index ended up 0.1% at 754.51. The Cboe 250 closed down 0.1% at 19,518.37, while the Cboe Small Companies ended 0.6% higher at 15,562.50.
In mainland Europe, the CAC 40 stock index in Paris ended down 0.2% and the DAX 40 in Frankfurt closed 0.3% lower.
In the latest developments, hundreds of US paratroopers landed at a Polish airport near the Ukrainian border on Wednesday as part of a deployment of several thousand to bolster NATO’s eastern flank amid tensions with Russia.
AFP reporters saw soldiers disembarking from two Boeing C-17 military transport planes and boarding buses at Rzeszow Airport, located around 100 kilometres from the border with Ukraine.
Soldiers were also transported on Black Hawk and Chinook helicopters to and from the airport.
In the FTSE 100, precious metal miners Fresnillo and Polymetal International ended the best performers, up 5.1% and 3.7% respectively, tracking spot gold prices higher.
The safe-haven metal stood at US$1,862.20 an ounce at the London equities close, higher against $1,848.09 at the London equities close Tuesday.
Oil majors BP and Shell ended up 1.6% and 2.0% respectively, tracking spot oil prices higher.
Brent oil was quoted at $96 a barrel at the equities close, up sharply from $92.50 at the close Tuesday. Any trouble in Ukraine, analysts have noted, could hurt supplies in an already extremely tight market.
In the FTSE 250, Indivior ended the best performer, up 14%, after the drugmaker swung to profit in 2021 and annual revenue moved closer to its eventual target of $1 billion.
The Richmond, Virginia-based company reported it had swung to profit in 2021, with pre-tax profit of $190 million, compared to a loss of $173 million the year before. In the final quarter, pre-tax profit was $39 million, turning from a loss of $14 million a year ago.
Indivior also said it was exploring the possibility of an additional US listing. The company said this could be beneficial to its profile and visibility, as around 80% of net revenue is generated in the US.
On AIM, debutant Clean Power Hydrogen surged following an initial public offering that raised less than first hoped.
CPH2 is a green hydrogen technology and manufacturing company based in Doncaster, England. It has developed a proprietary membrane-free electrolyser. The company will use the IPO funds for strengthening its financial position, as well as building out its manufacturing operation in Doncaster.
Though CPH2 called an offering oversubscribed, the £30.5 million raised in the IPO fell short of the company’s £50 million target announced back in January.
Shares in CPH2 closed at 61.5p, up 37% from its 45p IPO price. It has a market capitalisation of around £163 million.
On the economic front, the UK inflation rate surged to its highest level in three decades ramping up pressure on the Bank of England to tighten policy as household living standards get further squeezed.
The pound was quoted at US$1.3577 at the London equities close, up from $1.3535 at the close Tuesday.
The UK’s annual inflation rate accelerated to 5.5% in January from 5.4% in December. The figure topped market estimates cited by FXStreet, which had forecast inflation to remain steady in January.
January’s figure was the hottest since the current series began in 1997. The ONS said inflation was last higher in March 1992, when it had stood at 7.1%.
ING said another upside surprise to UK inflation will further cement expectations for additional rate rises at both the March and May Bank of England meetings.
‘The bank is keen to act pre-emptively against the risk that the current high rates of inflation become more sustained. And while a few categories are doing a lot of the leg-work, policymakers will also be acutely aware that price gains are reasonably broad-based,’ said ING’s James Smith.
‘Nevertheless, by pricing six rate hikes this year, markets are likely overestimating the pace of Bank of England tightening. We noted that a wage-price spiral looks unlikely in the UK. And the fact that policymakers are so worried about headline inflation today implies they may become more relaxed when CPI begins to dip later this year. We expect two, or maybe three, additional rate rises this year,’ Smith added.
The euro stood at US$1.1367 at the European equities close, firm from US$1.1365. Against the Japanese yen, the dollar was trading at JPY115.48, down from JPY115.70.
Stocks in New York were firmly in the red at the London equities close amid scepticism over Russia’s latest statements on Ukraine, while investors digested strong US retail sales data.
The DJIA was down 0.7%, the S&P 500 index down 0.8% and the Nasdaq Composite down 1.0%.
The US retail sector rebounded from a tough December to post forecast-topping sales growth in January, numbers from the Commerce Department showed.
According to the Census Bureau, retail sales rose 3.8% monthly in January, following a 2.5% decline in December. January’s figure topped expectations cited by FXStreet of a 2.0% increase.
In addition, investors are looking ahead to the release later Wednesday of minutes from the last Federal Reserve meeting.
The economic events calendar on Thursday has the latest US jobless claims numbers at 1330 GMT.
The UK corporate calendar on Thursday has annual results from household goods firm Reckitt Benckiser Group and emerging markets-focused bank Standard Chartered.
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