European stock markets were trading lower at midday on Friday and Wall Street was called for a negative open, despite a mostly positive market day in Asia, as observers despaired of a breakthrough in peace talks between Ukraine and Russia.
Investors were keeping a eye on the outcome of talks on Friday between the leaders of the US and China, the first such discussion since Russia invaded its neighbour.
The FTSE 100 index was down 53.42 points, or 0.7%, at 7,331.92. The mid-cap FTSE 250 index was down 186.34 points, or 0.8%, at 20,807.35. The AIM All-Share index was down 2.31 points, or 0.2%, at 1,023.02.
The Cboe UK 100 index was down 0.8% at 728.41. The Cboe 250 was down 1.1% at 18,337.15, and the Cboe Small Companies up 0.3% at 14,716.55.
In mainland Europe, the CAC 40 stock index in Paris was down 1.4% while the DAX 40 in Frankfurt was 1.5% lower.
New York was pointed to a lower open on Friday. The Dow Jones Industrial Average was called down 0.6%, the S&P 500 down 0.7%, and the Nasdaq Composite down 0.8%, based on futures trading. The indices closed up 1.2%, 1.2% and 1.3% respectively on Thursday.
Ipek Ozkardeskaya, a senior analyst at Swissquote, noted Friday represents a 'triple witching' day in the US, as a large number of options are set to expire. ‘There is an unusual amount of near-the-money options that could exacerbate the trading volumes and cause high volatility before the weekly closing bell,’ the analyst said.
In a call later Friday, US President Joe Biden will warn his counterpart Xi Jinping that China will face ‘costs’ for ‘any actions it takes to support Russia's aggression’, Secretary of State Antony Blinken said.
Beijing has refused to oppose Russia at the United Nations, nor even to use word the 'invasion' three weeks after Russian troops went into Ukraine, while stressing its opposition to punishing sanctions imposed by the West on Moscow.
After accusing Putin of being a ‘war criminal’, Biden hopes China will use ‘whatever leverage they have to compel Moscow to end this war’, the top US diplomat said.
Rescue workers searched desperately for any survivors buried beneath the rubble of Mariupol's bombed-out theatre Friday, as Russia's forces pounded residential areas across Ukraine, stoking allegations of war crimes.
In the wake of the attack, Blinken also said it was ‘difficult to conclude’ that Vladimir Putin's regime had not engaged in war crimes by targeting civilians.
Russia has routinely denied that it is targeting civilians, claiming without evidence that hardline Ukrainian nationalists blew up the theatre in Mariupol.
‘Investors are likely to cautiously monitor the key discussions between the US and China, as presidents Biden and Xi Jinping are set to meet later today to discuss Beijing's involvement in the war, for the first time since the beginning of the conflict,’ commented ActivTrades analyst Pierre Veyret.
US Secretary of State Antony Blinken said Russia was not making serious efforts in negotiations with Ukraine to end the three-week war.
‘On the one hand, we commend Ukraine for being at the table despite being under bombardment every minute of the day,’ Blinken said. ‘At the same time, I have not seen any meaningful efforts by Russia to bring this war that it is perpetrating to a conclusion through diplomacy.’
French Foreign Minister Jean-Yves Le Drian told newspaper Le Parisien, ‘unfortunately we're still facing the same Russian logic - making maximalist demands, wanting Ukraine to surrender and intensifying siege warfare.’
In the FTSE 100, Polymetal International was the best performer, up 1.5%. The Russian gold miner said it has appointed four new independent non-executive directors to its board after six non-execs resigned last week. Polymetal will be removed from the FTSE 100 and all FTSE indices, effective from Monday.
Glencore was up 1.0% after HSBC started coverage on the Swiss-based miner and commodities broker with a 'buy' rating.
In the FTSE 250, Softcat was the best performer, up 4.0% after Berenberg upgraded the IT infrastructure services provider to 'buy' from 'hold'.
Conversely, Workspace Group was down 3.0% after Bank of America downgraded the flexible-office-space provider to 'neutral' from 'buy'.
Investec was down 1.7%. The Anglo-South African financial services company lifted its full-year earnings guidance as top-line growth continued to gain traction and impairment charges dropped significantly.
Investec expects its adjusted earnings per share to range between 51 pence and 55p for the financial year ending March 31, up sharply from 28.9p in the prior year. The group in November forecast an increase to between 48p and 53p.
Thanks to net inflows of £2.0 billion and positive market conditions, Investec said its Wealth & Investment business boosted funds under management by 6.6% year-on-year to £61.9 billion for the 11 months ended February 28.
It warned though that the current market volatility may hit funds under management by the March year-end.
Elsewhere in London, Ted Baker was up 17% after Sycamore Partners Management confirmed a Sky News press report that it was in early stages of considering making a possible cash offer for the fashion retailer.
Sycamore Partners said it was considering a possible cash offer for Ted Baker but noted there was no certainty any offer would be made.
In response, Ted Baker confirmed that it had not received any approach from Sycamore. Further, the retailer said it was confident in its independent prospects and would evaluate any offer against the shareholder value creation which it believes can be delivered as a standalone company.
Rival fashion retailer Superdry was up 2.5%, while AIM-listed lifestyle brand Joules Group gained 13% in a positive read-across.
‘We would not be surprised if private equity firms targeted these brands, now in deep value territory,’ Shore Capital's Eleonora Dani said.
The pound was quoted at $1.3130 at midday on Friday, down from $1.3155 at the London equities close Thursday.
The euro was priced at $1.1045, lower against $1.1113. Against the Japanese yen, the dollar was trading at its highest levels since 2016, quoted at JP¥119.04 in London, up from JP¥118.44 late Thursday.
Brent oil was quoted at $107.51 barrel Friday at midday, up from $106.62 late Thursday. Gold stood at $1,938.46 an ounce, lower against $1,942.97.
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