It was a disappointing session in London on Thursday as the back and forth between Russia and the US over Ukraine continued to dominate news headlines, weighing on market sentiment.
In the latest developments, the US stepped up warnings of an imminent Russian invasion of Ukraine on Thursday, despite Moscow's continued denials and announcements of troop withdrawals from near the border.
Adding to the already fierce tensions, Ukraine and Moscow-backed separatists traded accusations of intensifying shell fire across their frontline, with Western officials saying Moscow was looking to create a pretext for an invasion.
The threat of an invasion is 'very high, because they have not moved any of their troops out. They've moved more troops in,' US President Joe Biden told reporters at the White House.
The FTSE 100 index closed down 66 points or 0.9% at 7,537 points. The mid-cap FTSE 250 index ended down 271 points or 1.2% at 21,557 points, while the AIM All-Share index ended down 7 points or 0.6% at 1,072 points.
In mainland Europe, the CAC 40 stock index in Paris ended down 0.3% and the DAX 40 in Frankfurt closed 0.7% lower.
GROWING RISK
At the United Nations, where the Security Council was set for a heated meeting on the crisis, the US envoy said Washington wanted to make clear that risk of a war in Europe was growing.
Russia meanwhile responded to previous US security proposals aimed at defusing the crisis, insisting it was not planning any invasion but making clear that it felt its key demands were being ignored. Further, Russia also expelled the number two US diplomat in Moscow, the US State Department said, condemning what it called an 'unprovoked' action.
RECKITT ON POLE
On the FTSE 100, Reckitt Benckiser was the best performer up 5.9% after the household goods firm pointed to a margin improvement in the year.
Reckitt said revenue in 2021, lapping tough comparatives, fell 5.4% to £13.23 billion from £13.99 billion. At constant currency, the decline was 0.3%. However, this topped company-compiled consensus of £13.18 billion.
Excluding the contribution of its former Infant Formula & Child Nutrition business in China, Reckitt's annual revenue fell 2.1% to £12.85 billion from £13.13 billion, though beat expectations of £12.8 billion. At constant currency rates, revenue by this measure was up 3.3%.
Back in June, Reckitt agreed to sell the business to Primavera Capital Group for USD2.2 billion. The disposal was completed in September.
The Nurofen painkiller maker swung to a pretax loss of £260 million for the year from a £1.87 million profit in 2020, due primarily to a huge loss on disposal. Reckitt declared an unchanged annual dividend. It expects 1% to 4% net revenue growth in 2022.
OTHER MOVERS
Precious metals miner Fresnillo closed up 4.3% tracking spot gold prices higher.
The safe-haven metal stood at $1,895.50 an ounce at the London equities close, advancing against $1,862.20 late Wednesday.
The precious metal has received a boost from Russia-Ukraine tensions, falling bond yields and accelerating inflation, ThinkMarkets analyst Fawad Razaqzada noted.
Standard Chartered reversed an earlier decline to close up 1.7%, as the emerging markets-focused lender delivered doubled annual profit and a bolstered payout.
The London-based bank reported pretax profit for 2021 of $3.35 billion, more than doubled from $1.61 billion a year prior, but missing analyst expectations of $3.84 billion by 13%. Net interest income slipped 0.7% to $6.80 billion from $6.85 billion, beating the $6.78 billion analyst consensus, as low interest rates scuppered growth. Adjusted net interest margin narrowed to 1.21% from 1.31%.
StanChart ended 2021 with a CET 1 ratio of 14.1%, edging down closer to the company's minimum target of around 14.0% for 2021. StanChart noted that an imminent USD750 million share buyback programme is expected to reduce its CET 1 ratio by around 30 base points.
StanChart missed analyst forecasts for dividends, having proposed a final dividend of 9 US cents per share. This matched 2020's final dividend, when 9 cents was the maximum allowed under regulatory guidance at the time. This brought StanChart's total annual payout to 12 cents, up 33% on the prior year's 9 cents.
At the other end of the large-caps, Russian steelmaker Evraz ended the worst performer, down 7.5%, amid Russia-Ukraine tensions.
British Airways parent International Consolidated Airlines lost 4.1% in a negative read-across from continental rival Air France-KLM. Hungarian airline Wizz Air was the worst performer in the FTSE 250, down 7.4%.
The Franco-Dutch carrier said its net loss narrowed by more than half last year but would need more capital strengthening measures due to the pandemic. The stock closed down 7.8% in Paris.
Elsewhere, John Menzies surged 24% at 579.29 pence after the aviation services provider's takeover suitor said it has agreed to buy a 13% stake in the company at a significant premium.
John Menzies on Tuesday repeated its rejection of a takeover approach from Agility Public Warehouse Co KSC, saying the terms 'fundamentally undervalue Menzies and its future prospects'. Agility on Monday had argued its latest cash proposal of 510p per John Menzies share would give 'full and fair' value for shareholders.
In the latest twist, NAS said Agility Strategies Holding Ltd, an entity under common control with and acting in concert with NAS, has agreed to buy 12.1 million shares in John Menzies, representing just over a 13% stake, at a price of 605p per share.
Consequently, any firm offer for John Menzies will be made at a price of not less than 605p per share, being more than double its closing price of 290p on February 2. This 605p marks a 19% premium to NAS's previous 510p approach.
US TRADING
Stocks in New York were firmly in the red at the London equities close as tensions between Russia and Ukraine flared up again.
The Dow Jones Industrial Average was down 1.2%, the S&P 500 index was down 1.4% and the Nasdaq Composite 1.6% lower.
Bucking the trend, shares in Walmart were up 2% in New York after the retailer set out plans for a $10 billion share buyback in the year ahead as it swung to a fourth quarter profit.
With 'other' losses shrinking to $725 million from a hefty $5.59 billion a year before, the Bentonville, Arkansas-based firm swung to net profit of $3.63 billion from a loss of $2.01 billion. Diluted earnings per share were $1.28 against a loss of $0.74 a year earlier.
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