European markets were lower early Wednesday, while oil and gold prices were higher, after Ukraine and Western governments cast cast doubt on Moscow's pledge to withdraw troops from around Kyiv.
Ukraine President Volodymyr Zelensky sounded a note of cautious optimism following Tuesday's peace talks - though he said the ‘positive’ signals ‘do not drown out the explosions or Russian shells’ and vowed in a video address late Tuesday to keep up defence efforts.
In Paris, the CAC 40 index was down 0.7%, while the DAX 40 in Frankfurt fell 1.1%.
However, in London, oil majors BP and Shell were supporting the FTSE 100. The large-cap index was up 12.45 points, or 0.2%, at 7,549.70 early Wednesday.
The mid-cap FTSE 250 index was down 134.60 points, or 0.6%, to 21,357.37. The AIM All-Share index was down 2.18 points, 0.2%, at 1,044.21.
The Cboe UK 100 index was up 0.3% at 750.95. The Cboe 250 was down 0.5% at 18,897.07, and the Cboe Small Companies was 0.2% higher at 15,377.69.
‘Reports that Russia is de-escalating military operations around Kyiv have further buoyed market risk sentiment, although the Kremlin said it does not amount to a ceasefire and it was met with some scepticism in the US,’ analysts at Lloyds Bank commented.
Inflation will also be in focus, with figures from Spain, Italy and Germany due on Wednesday.
Lloyds analysts added: ‘Eurozone inflation, as elsewhere, has risen significantly in recent months, even before the war in Ukraine which has highlighted Europe’s dependency on Russian gas and other energy imports. The conflict has the potential to drive eurozone annual headline inflation rates sharply higher from the already elevated 5.8% in February.
‘The March flash CPI estimate is due on Friday, but key national inflation data will be released ahead of that including Spanish and German figures today, followed by France and Italy tomorrow. In particular, the national outturns will be watched closely for signs that the eurozone flash CPI in March will jump up by more than the consensus forecast of 6.7% (our central forecast is 7.3%).’
Already out, Spain reported March consumer price inflation of 9.8%, accelerating from 7.6% in February.
In the US calendar, the latest ADP jobs report is released at 1315 BST, before US gross domestic product data at 1330 BST.
Ahead of the economic data, the dollar was mixed.
The pound was quoted at $1.3120 early Wednesday in London, down from $1.3135 late Tuesday. The euro stood at $1.1128, up from $1.1113. Against the yen, the dollar was trading at JP¥121.86, down from JP¥122.57.
Brent oil was quoted at $112.68 a barrel early Wednesday in London, up from $109.35 at the European equities close on Tuesday.
On the London Stock Exchange, BP rose 1.4% and Shell was up 2.6%, tracking oil prices higher. Tullow Oil was the best mid-cap performer, up 2.2%. Over in Paris, TotalEnergies was 2.2% higher.
Gold stood at $1,924.08 an ounce early Wednesday, up from $1,910.78 late Tuesday.
John Menzies rose 3.9% at 592.00 pence. The aviation services firm accepted a formal takeover offer from GIL International Holdings V, a subsidiary of Kuwait's Agility Public Warehousing.
The deal, at 680 pence per share, values John Menzies at £571 million on a fully diluted basis and offers an enterprise value of £763 million.
The consideration is 81% higher than the company's share price of 335p on February 8, the day before it entered an offer period. It is 19% higher than its 570p closing price on Tuesday.
Menzies has a market capitalisation of £544.2 million.
The deal ends a long-running saga. Back in early-February, Menzies said it rejected a 510p bid from its Kuwaiti suitor. It followed a previous unsolicited cash offer of 460p a share, the company explained.
Video game services firm Keywords Studios posted double-digit growth in revenue and profit. The stock was 3.8% higher.
In 2021, revenue rose 37% to €512.2 million from €373.5 million. Pretax profit jumped 48% to €48.0 million from €32.5 million.
Keywords recommended a final 1.45p dividend, taking its annual payout to 2.15p It did not pay a dividend in respect to 2020.
It has also made a decent start to the new year, it noted.
Keywords expects 2022 to be a ‘particularly strong year for new game launches’.
For 2022, Keywords expects an annual outturn at the top end of current market expectations.
Company-compiled consensus has revenue for 2022 at a €587 million to €610 million range, with adjusted pretax profit between €90 million and €95 million.
Elsewhere in the video game sector, Team17 fell 5.9%. Although the video game developer reported stronger annual results, it warned of rising costs and the impact of Russia's invasion of Ukraine.
Pretax profit rose 11% in 2021 to £29.1 million from £26.2 million in 2020. Revenue was 9.0% higher at £90.5 million from £83.0 million.
Team17 said: ‘The board continues to be mindful of the ongoing impact of the pandemic including uncertain working environments alongside cost of living and wage inflation, the combination of which are expected to increase group costs in FY22 by £1.7 million.’
In addition, it expects the situation in Ukraine to hit revenue by £4 million and hurt its earnings before interest and tax by £2.5 million.
Petropavlovsk shares were 0.6% lower, but they initially had slumped 14% shortly after the open. The gold miner said it is mulling a debt restructuring with Russian lender Gazprombank, which has been sanctioned.
An interest payment of $560,000 was due to be paid by Petropavlovsk last week Friday. In addition, a payment worth the ruble equivalent of $9.5 million under a revolving credit facility was due on Monday.
As a consequence of the sanctions, the company was unable to pay either of those.
Petropavlovsk last week Friday warned it has a $200 million term loan and a $86.7 million revolving credit facility with Gazprombank.
A condition of the financing means Gazprombank acts as an off-taker for all of Petropavlovsk's gold output.
Petropavlovsk on Wednesday said it is in the ‘early stages of discussions with its advisers and Gazprombank’ in relation to a potential restructuring of its debt.
The company has a $500 million 8.125% set of guaranteed notes scheduled for maturity in November.
Asian stocks closed higher on Wednesday.
In Sydney, the S&P/ASX 200 rose 0.7% on Wednesday. The Nikkei 225 ended 0.8% lower in Tokyo. The Shanghai Composite closed up 2.0%, and the Hang Seng in Hong Kong was 1.6% higher in late trade.
Copyright 2022 Alliance News Limited. All Rights Reserved.
