Brent oil jumped back above $110 a barrel on Monday, allowing the FTSE 100 index in London to outperform European counterparts.
Ukraine rejected a Russian ultimatum to surrender the besieged southern city of Mariupol on Monday, as renewed overnight shelling killed at least eight people at a shopping mall in the capital Kyiv.
Almost 350,000 people are trapped without water and electricity in the port city of Mariupol, which has been bombarded by Russian troops for almost a month in what has been described as a ‘massive war crime’ by EU policy chief Josep Borrell.
Elsewhere in Ukraine, Russian bombs struck targets overnight, allegedly damaging a chemical plant in the north of the country causing an ‘ammonia leakage’ that sparked a temporary alarm.
Ukraine’s President Volodymyr Zelensky urged Europe to significantly dial up pressure on Moscow to halt its nearly month-long invasion, saying the continent must cease all trade with Russia.
The FTSE 100 index was up 37.11 points, or 0.5%, at 7,441.84. The mid-cap FTSE 250 index was down 127.45 points, or 0.6%, at 21,029.17. The AIM All-Share index was down 0.61 of a point at 1,034.44.
The Cboe UK 100 index was up 0.9% at 742.01. The Cboe 250 was down 0.6% at 18,540.13, and the Cboe Small Companies up 0.7% at 14,883.18.
In mainland Europe, the CAC 40 stock index in Paris was down 0.1% and the DAX 40 in Frankfurt was up 0.1%.
ActivTrades analyst Pierre Veyret commented: ‘European shares opened without clear direction on Monday...as global risk appetite seems to be taking a break following record gains registered last week.
‘This week is likely to be crucial, as investors discover if last week’s solid rebound was just a volatile move or the start of a new trend. Diplomatic talks between Russia and Ukraine will remain as one of the top market drivers this week, with traders still monitoring slow but real progress towards a ceasefire, which should help sustain market sentiment.’
In the FTSE 100, Antofagasta was up 5.5% as the Chilean copper miner looks set to exit a copper and gold mining project in Pakistan.
Canada’s Barrick Gold on Sunday said it has agreed a deal with authorities in Pakistan that will see work at the Reko Diq mine resume. Antofagasta will exit the project and be replaced by state-owned enterprises in Pakistan.
Work at the project was suspended back in 2011 due to a dispute about the legality of the licensing process. Antofagasta’s exit process will see the project reconstituted under Tethyan Copper Co, a joint-venture controlled by Antofagasta and Barrick.
A consortium of state-owned firms in Pakistan will then acquire shares in the TCC unit that owns the project, in a $900 million deal.
Oil majors BP and Shell were up 3.1% and 3.0% respectively, tracking spot oil prices higher.
Brent oil was trading at $112.84 a barrel Monday at midday, up sharply from $107.51 late Friday. The North Sea benchmark is up 44% so far this year.
Oil prices got a boost from renewed attacks by Yemen’s Iran-backed Huthi rebels in Saudi Arabia and potential fresh sanctions against Russia over the invasion of Ukraine.
State-owned oil producer Saudi Arabian Oil said net profit multiplied in 2021, due to higher crude prices, as global economic growth recovered from a pandemic induced downturn.
The announcement on Sunday came hours after Yemen’s Huthi rebels - against whom Saudi Arabia leads a military coalition - targeted several locations, including Aramco facilities, in cross-border armed drone attacks. Aramco did not say whether the attacks caused damage.
Aramco shares ended down 0.7% in Riyadh on Monday.
The rise in oil prices comes as UK Chancellor Rishi Sunak is reportedly gearing up to slash fuel duty in his spring statement as UK Prime Minister Boris Johnson pursues long-term measures to guard against future energy bill pressures.
Sunak appeared on Sunday to hint at help for motorists in his so-called ‘mini-budget’, with measures to prevent filling up cars from being ‘prohibitively expensive’ expected to be unveiled on Wednesday.
There are suggestions the chancellor could temporarily cut fuel duty by as much as 5p per litre to support families and businesses through the cost of living crisis, PA reported.
Hargreaves Lansdown was down 2.5%, after Jefferies downgraded the fund supermarket to ‘underperform’ from ‘hold’.
Segro was down 1.5%. Exane BNP cut the warehouse property investor to ‘neutral’ from ‘outperform’.
London Stock Exchange Group was down 0.8%. LSEG said it has agreed to sell its BETA+ wealth technology platform to affiliates of Clearlake Capital Group and Motive Partners for $1.1 billion.
LSEG said the deal is expected to complete in the second half of 2022. The announcement confirmed a report by Sky News
The dollar was higher across the board. The pound was quoted at $1.3130 at midday Monday, down from $1.3178 at the London equities close Friday. The euro was priced at $1.1037, down from $1.1061. Against the Japanese yen, the dollar was trading at JP¥119.22 in London, up from JP¥119.15.
Gold stood at $1,926.23 an ounce, lower against $1,938.46 late Friday.
New York was pointed to a subdued open on Monday. The Dow Jones Industrial Average was called down 0.1%, the S&P 500 flat, and the Nasdaq Composite down 0.1%, based on futures trading. The indices closed up 0.8%, 1.2% and 2.1% respectively on Friday.
On the corporate front, Boeing shares were down 6.4% in pre-market trade. A China Eastern passenger jet carrying 133 people has crashed in southwest China and caused a mountain fire with casualties unknown, state broadcaster CCTV reported Monday.
The Boeing 737 plane crashed in the rural countryside near Wuzhou city, Guangxi region and ‘caused a mountain fire’, CCTV said, citing the provincial emergency management bureau.
The report added that rescue teams were dispatched to the scene.
Berkshire Hathaway signed a definitive agreement to acquire New York City-based insurance investment group Alleghany.
The Omaha, Nebraska-based firm run by Warren Buffett will acquire Alleghany for $848.02 per share in cash for a total value of $11.6 billion. Alleghany shares were up 25% at $845.00 in pre-market trade in New York.
Alleghany owns multiple operating subsidiaries and manages investments, with a core position in property and casualty insurance and reinsurance.
Berkshire Hathaway said the acquisition is a ‘strong strategic fit’. Alleghany will continue to operate as an independent entity, boosted by capital and support from Berkshire Hathaway.
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