London stock indices were mixed at midday on Wednesday, as doubts surfaced over Russia’s reported withdrawal from the border of Ukraine, meaning the threat of invasion stayed high.
The renewed fear of war in Europe coincided with further indications of rampant price inflation in the UK, threatening economic growth.
The FTSE 100 index was down 15.33 points, or 0.2%, at 7,593.59. The mid-cap FTSE 250 index was up just 1.57 points at 21,854.08. The AIM All-Share index was up 1.66 points, or 0.2%, at 1,080.21.
The Cboe UK 100 index was flat at 753.64. The Cboe 250 was flat at 19,524.00, and the Cboe Small Companies was down 0.1% at 15,456.55.
In mainland Europe, the CAC 40 in Paris inched up 0.1%, while the DAX 40 in Frankfurt was only marginally higher.
NATO chief Jens Stoltenberg on Wednesday said Russia's military build-up seemed to be continuing around Ukraine despite Moscow announcing the pullback of more forces.
‘We have heard the signs from Moscow about readiness to continue diplomatic efforts, but so far, we have not seen any de-escalation on the ground,’ Stoltenberg said ahead of a meeting of NATO defence ministers.
‘On the contrary, it appears that Russia continues their military build-up,’ he said.
Stoltenberg said it remains to be seen whether there is a Russian withdrawal. Stoltenberg said Moscow still maintained the ability to launch a major attack on Ukraine and said NATO remained ‘prepared for the worst.’
Russia on Wednesday said military drills in Moscow-annexed Crimea had ended and that soldiers were returning to their garrisons, a day after it announced a troop pullback from Ukraine’s borders.
The pound was quoted at $1.3569 midday Wednesday, up from $1.3535 at the London equities close on Tuesday.
The UK’s annual inflation figure raced to just shy of a 30-year high in January, according to the Office for National Statistics. The yearly inflation rate accelerated to 5.5% in January from 5.4% in December. The figure topped market estimates, which had forecast inflation to remain steady in January.
January’s figure was the hottest since the current series began in 1997. It is the chunkiest inflation figure since a historic series registered 7.1% in March 1992.
London-listed retailers struggled on Wednesday, amid concern rising prices will put off shoppers.
JD Sports fell 1.5%, Primark-owner Associated British Foods lost 0.7%, while Marks & Spencer gave back 1.6%.
Elsewhere on the inflation front, a European Central Bank policymaker told the Financial Times that the central bank should start thinking about gradually withdrawing its economic stimulus measures.
Isabel Schnabel, a member of the ECB’s executive board, said the ECB risks acting ‘too late’ against soaring inflation.
Record 5.1% inflation in the eurozone in January meant 'the risk of acting too late has increased and therefore we need a careful reassessment of the inflation outlook,' Schnabel told the Financial Times in an interview published late Tuesday on the bank's website.
The euro stood at $1.1387 on Wednesday afternoon, firm on $1.1365 at the European equities close on Tuesday. Against the yen, the dollar was trading at ¥115.66, down from ¥115.70.
The Federal Reserve will be under the spotlight at 19:00 GMT, when minutes from its most recent meeting are released.
BDSwiss analyst Marshall Gittler commented: ‘Usually, this would be the highlight of the day, but this month I think the minutes are already out of date. Since the meeting took place on January 26 we got the blow-out January employment data showing 467,000 new jobs plus last week's shocking CPI showing inflation at a 40-year high. Market participants are now looking ahead to the March meeting more than looking back at the January meeting.’
Elsewhere on the economic calendar, US retail sales numbers are released at 1330 GMT.
Ahead of the report, US futures were lower. The Dow Jones Industrial Average and the S&P 500 are called down 0.2% and the Nasdaq Composite 0.1% lower.
Brent oil was quoted at $94.17 a barrel midday Wednesday, up from $92.50 a barrel at the equities close on Tuesday. Gold stood at $1,855.42 an ounce, up from $1,848.09.
In London, Indivior shares jumped 12%, the best FTSE 250 performer. Indivior reported a swing to profit for 2021. The North Chesterfield, Virginia-based maker of treatments for opioid addiction also unveiled plans to pursue a US listing.
Revenue in 2021 increased 22% to $791 million from $647 million. Indivior posted a pre-tax profit of $190 million, swinging from a $173 million loss in 2020.
Indivior expects revenue between $840 million and $900 million for 2022, potentially a 14% rise from 2021.
Chief Executive Mark Crossley added: ‘Together with the board, we have been assessing the optimal listing structure for Indivior’s shares. Our preliminary view is that an additional US listing is likely to be beneficial to the group’s profile and visibility, as approximately 80% of the group's net revenue is generated in the US.’
On AIM, Franchise Brands said it has agreed terms for an all-share takeover offer for Filta Group, valuing the cooking oil filtration and fryer management services firm at £49.8 million based on Tuesday's close.
Franchise Brands shares were 2.4% lower at 144p, valuing the company at £138.1 million. Filta's stock was down 2.2% at 155p, giving a market capitalisation of £45.2 million.
Under the agreement, Manchester-based brand owner Franchise Brands will issue 1.157 shares in exchange for each share in Filta.
Elsewhere on AIM, debutant Clean Power Hydrogen surged just under 30% on Wednesday, 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 were trading at 58.22p, up 29% from its 45p IPO price. It has a market capitalisation of $154.5 million.
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