17.30 (CLOSE): Improved sentiment on Wall Street helped blue-chip shares shake off worries over Ukraine and wipe out early session losses.
London’s FTSE 100 Index closed 22.1 points ahead at 6583.8 after US retail sales notched up their biggest increase since 2012.
Meanwhile, a better-than-expected set of results from Citigroup eased fears over America’s corporate profits that had earlier weighed on stocks.
Bounce expected: US stocks had seen rallying today encouraged by some upbeat corporate earnings and economic data
Germany’s Dax and France’s Cac 40 also ended ahead, while New York’s Dow Jones Industrial Average was up at the time of the close in London.
On currency markets, the pound held its own at 1.67 US dollars and 1.21 euros.
In London, a choppy day of trading had seen the FTSE 100 start in the red as it followed overnight falls in Asia, adding to a 2 per cent decline for the top-flight over the course of last week.
The downcast mood was compounded by Ukraine’s government announcing that it was sending in troops to try to quash a pro-Russian insurgency in the east of the country, despite warnings from the Kremlin.
Poor sentiment was also linked to anxiety about faltering profits among leading US-listed companies, with analysts expecting earnings for companies in the Standard & Poor’s 500 to drop 1.6 per cent from a year earlier.
But this was brushed aside as traders took heart from the more positive signs from the US on Citigroup and retail sales.
It was also a strong session for commodities-based stocks after Glencore Xstrata announced a deal worth 5.85 billion US dollars (£3.5billion) to sell its interest in the Las Bambas copper mine in Peru to Chinese investors.
Glencore’s shares were 6.3p higher at 317.9p, while the read-across for other copper miners resulted in a rise of 17p to 842p for Chile’s Antofagasta.
The ongoing pressure on tech stocks meant chip designer ARM Holdings slipped another 4p to 954.5p while Imagination Technologies was 2.8p lower at 196.9p in the FTSE 250 Index.
Defensive stocks were doing better, with drugs giant Reckitt Benckiser up 99p to 4833p, Imperial Tobacco ahead 27p to 2474p and Unilever rising 28p to 2663p.
Plant hire firm Ashtead was the biggest faller in the FTSE 100 Index as ongoing uncertainty over the outlook for the US economy impacted on sentiment surrounding its US arm Sunbelt. Shares fell 4% or 38p to 842p.
Elsewhere, shares in fashion retailer French Connection soared after it posted a big jump in sales amid more evidence that its recovery efforts are starting to pay off.
The group, which has 131 stores and concession outlets in the UK and Europe, said comparable sales were 11 per cent higher in the 11 weeks to last weekend.
Shares jumped by 11 per cent, or 7.2p, to 74.2p to leave the stock at its highest level since late 2011.
The biggest FTSE 100 risers were Sainsbury’s up 16.9p to 326.5p, Tullow Oil up 32p to 859p, Randgold Resources up 170p to 4845p and Tesco up 8.3p to 289.4p
The biggest fallers were Ashtead down 38p to 842p, Hargreaves Lansdown off 50p at 1207p, Sports Direct down 30.5p to 740.5p, and Barratt Developments down 14.8p to 371.5p.
14.55: The Footsie notched up some modest gains in midafternoon trade having bounced back from earlier falls as US stocks posted an opening rally with investors focused on some better than expected results from Citigroup and strong retail sales data.
With just over an hour and a half of trading to go, the FTSE 100 index was up 3.7 points at 6,565.4, well above session lows although gains remained limited by concerns over escalating tensions between Russia and Ukraine.
But Wall Street managed to take the Ukrainian situation in its stride as investors celebrated the brighter news on earnings from banking giant Citigroup which relived some of the pressure on concerns that valuations have run too far ahead.
Modest recovery: The Footsie managed slim gains in afternoon trade as US stocks rallied, but the mood remains nervous
In early deals in New York, the Dow Jones Industrial Average gained 61.9 points at 16,088.6, recovering after some hefty falls last week, with Citigroup shares up nearly 4 per cent.
But although the Citigroup results beat was welcomed, underlying concerns about the earnings season remained.
Kathleen Brooks, research director UK and EMEA at FOREX.com said: ‘While only 28 of the 500 companies in the S&P have reported earnings so far, the results have been less than inspiring and are setting a worrying precedent for investors.
‘While earnings have generally been stronger, the sales side of the equation is weak, with 40 per cent of the first 28 firms to report missing sales estimates.
‘Weak sales growth is nothing new, but now that the market appears to believe that valuations are looking rich, investors are starting to take notice. If companies can’t beat sales expectations in an environment of low interest rates, when can they?’
However Brooks was less concerned about valuations being too high, saying stocks are ‘not at historically stretched levels.’
‘The Nasdaq’s current reading of just over 20 is a third less than it was in 2005. They are also nowhere near the peak reached in 2001, during the dotcom bubble. This does not mean that the market has “got it wrong” and stocks should not sell off.
‘Of course, not all sell-offs have to be like 1929, 2001 or 2008, instead it may suggest that the pullback may not be as aggressive if the market valuations are less stretched. Also, US economic data is rebounding after a torrid start to the year,’ she added.
13.55: The Footsie bounced back from earlier falls, pushing higher as the afternoon session progressed, with expectations for an opening rally on Wall Street helping offset worries about heightened tensions between Russia and Ukraine.
The FTSE 100 index was 9.4 points higher at 6,5871.1, recovering from morning falls to a session low of 6,507.1.
US stock index futures pointed to a modest recovery in New York today after a run of hefty falls last week as results from banking giant Citigroup lifted some of the gloom surrounding the just-started earnings season, together with some better than expected US economic data.
After JPMorgan Chase kicked off the US bank’s reporting season with disappointing numbers on Friday, Citigroup pleased the market today after its first quarter adjusted net income rose 4 per cent to $ 4.15billion.
Citigroup saw a smaller than expected loss on its troubled assets make up for a drop in revenue and profit from its core trading and lending businesses.
Meanwhile, US retail sales rose 1.1 per cent in March, the Commerce Department said today, the largest gain since September 2012, and better than the 0.8 per cent increase economists had predicted.
12.45: The Footsie stayed weak at lunchtime, hovering near a three-week low, as worsening tensions over Ukraine unsettled investors once again, notably hitting heavyweight oil firm BP.
Around midsession, the FTSE 100 index was down 23.2 points, at 6,538.6 points, extending last week’s sharp falls as worries about the situation in Ukraine returned to dog already vulnerable markets.
Ukraine’s government announced it was sending in troops to try to quash a pro-Russian insurgency in the east of the country, despite warnings from the Kremlin.
Tensions high: Ukraine’s government has sent in troops to try to quash a pro-Russian insurgency in the east of the country
It appeared to increase the risk of tougher sanctions on Russia that could impact energy supplies and trade.
Weakness in oil giant BP was a big drag on the blue chip, with the stock down 6.9p to 486.6p on heightened Ukraine/Russian tensions. BP has a stake in Russia’s biggest oil producer Rosneft.
Joao Monteiro, analyst at Valutrades said: ‘There appears to be a multitude of reasons for the current volatility in stock markets; bloated valuations, geopolitical pressures emanating from the Ukraine and Russia, the outlook for equity-friendly monetary stimulus and caution ahead of a raft of data out of China later this week, which is expected to show a weak underbelly to the economy and point to growth lower than the 7.5 per cent originally targeted.’
Traders also fretted over forecasts for lower corporate profits in the US, with the earnings season continuing today with numbers from Citigroup, which come hot on heels of disappointing results from US banking peer JPMorgan Chase on Friday.
UK banks were lower in London, particularly those with strong US exposure, with taxpayer-owned Royal Bank of Scotland – which owns Citizens in the US – down 4.9p at 301.1p, while Barclays lost 3.4p at 232.7p.
GlaxoSmithKline was also a big blue chip faller, down 12.5p 1,539.9p with the drugs giant having been accused of bribing doctors to prescribe its medicines in Europe in a television programme to be broadcast tonight.
The UK-based company, which has faced claims of corruption in China and Iraq, has been accused over its alleged behaviour in Poland.
A former sales representative for the company told the BBC’s Panorama programme that reps paid doctors to boost prescriptions there.
Housebuilders were under pressure as well today, with the recently high-flying sector coming down to earth as investors fretted over valuation concerns.
Blue chip Barratt Developments shed almost 5 per cent or 18.6p to 368.0p, while Persimmon – which issues a trading update on Wednesday – dropped over 4 per cent, or 55.0p to 1,260.0p.
The weakness in the sector came as fresh data showed property asking prices in the UK hit a record high once again this month and rose at their fastest annual pace since October 2007.
Property website Rightmove said the average figure of £262,594 set by homesellers in April is 2.6 per cent higher than last month’s £255,962 and 7.3 per cent higher than April 2013.
Among the minority blue chip gainers, defensive stocks managed to make headway, with household products firm Reckitt Benckiser up 134.0p to 4,868.0p, Imperial Tobacco ahead 39.0p to 2,486.0p and Unilever rising 37.0p to 2,672.0p.
Elsewhere, shares in fashion retailer French Connection soared 11 per cent, or 7.5p, to 74.5p to hit their highest level since late 2011 after it posted a big jump in sales amid more evidence that its recovery efforts are starting to pay off.
The group, which has 131 stores and concession outlets in the UK and Europe, said comparable sales were 11 per cent higher in the 11 weeks to last weekend.
09.30: A multi-billion dollar deal in the mining sector failed to lift the London market today, with the Footsie easing back as concerns persisted over the value of technology shares and worries increased over tensions in Ukraine.
As the morning session progressed, the FTSE 100 index was down another 26.8 points to 6,534.9 after posting heavy losses in a number of sessions last week in tandem with big falls on Wall Street.
The recent sell-off in global markets has been driven by a slump in the tech-laden US Nasdaq composite index which suffered another poor session on Friday.
Copper deal: Glencore Xstrata was a big Footsie gainer after selling its interest in the Las Bambas copper mine in Peru to a consortium of Chinese investors for £3.5billion
The latest loss came despite a strong session for commodities-based stocks after Glencore Xstrata announced a deal worth £3.5billion to sell its interest in the Las Bambas copper mine in Peru to a consortium of Chinese investors.
Glencore’s shares were 5.5p higher at 317.02p, while the read-across for other copper miners resulted in a rise of 14.5p to 839.5p for Chile’s Antofagasta.
The ongoing sell-off involving tech stocks meant chip designer ARM Holdings fell another 11p to 947.5p while on the second line Imagination Technologies was 4.4p lower at 195.45p in the FTSE 250 Index.
Plant hire firm Ashtead was the biggest faller in the FTSE 100 Index as ongoing uncertainty over the outlook for the US economy impacted on sentiment surrounding its US arm Sunbelt. Ashtead shares fell 3 per cent or 25.5p to 854.25p.
08.20: The Footsie dropped back in opening deals this morning, starting the new week in the same cautious fashion it ended the last following fresh declines on Wall Street and as tensions in Ukraine mount up.
In early trade, the FTSE 100 index shed 9.9 points to 6,551.8 having dropped 80.27 points, or 1.2 per cent on Friday which saw the UK benchmark index suffer its biggest weekly loss in a month with a 2 per cent fall.
The weekly decline left the index, which got close to its best level since early 2000 in January, down about 2.8 per cent on the year.
Sell-off continues: The Footsie shouldered big losses in early trading once again with tensions in Ukraine keeping investors nervous
US stocks sank again on Friday, with technology and biotech stocks again under pressure on valuation concerns, with the tech-laden Nasdaq composite index dropping 1.3 per cent, to close below the 4,000 mark for the first time since early February.
European stock markets were unsettled after Ukraine gave pro-Russian separatists a Monday morning deadline to disarm or face a ‘full-scale anti-terrorist operation’ by its armed forces, raising the risk of a military confrontation with Russia.
Meanwhile the United Nations Security Council held an emergency session on Sunday night to discuss the escalating crisis in Ukraine.
Jonathan Sudaria, dealer at London Capital Group said: ‘Quite what exactly has markets in such a bearish frame of mind is hard to put a finger on and pundits have been spewing out justifications for the moves lower from overvalued tech stocks, China fears and even traders squaring their books ahead of the Easter break.
‘However, one thing certainly adding to the risk off sentiment will be the developments in Ukraine. There had been hopes that the situation may have climaxed in the annexation of the Crimea, but with pockets of pro Russian support springing up all over the east, and authorities in Kiev looking like they’re about to lose their patience with diplomacy, it’s clear that this is only the opening chapter in what could be formative moment for geopolitical relations.’
Stocks to watch include:
TESCO – Tesco is expected to report a 6 per cent fall in annual profit this week, a second straight decline which would pile the pressure on boss Phil Clarke who is struggling to turn around Britain’s biggest retailer.
GLAXOSMITHKLINE -The drugmaker is facing a criminal investigation in Poland for allegedly bribing doctors to promote its asthma drug Seretide, according to BBC Panorama report.
GLENCORE XSTRATA – The blue chip commodities group has sold its interest in the Las Bambas copper mine in Peru to a Chinese consortium in a $ 6billion cash deal, making it one of China’s largest mining acquisitions in recent years.
ANGLO AMERICAN – Anglo American is seeking compensation from Venezuela at a World Bank tribunal over the 2012 cancellation of mining concessions by late president Hugo Chavez’s government.
ROYAL DUTCH SHELL, BP – The two oil giants have signed deals to supply Kuwait with liquefied natural gas over the next few years, a Kuwait Petroleum Corp. official was quoted by Reuters as saying.
PUNCH TAVERNS – Britain’s second biggest pubs group has brought in an independent corporate restructuring expert to aid long-running discussions over its £2.3billion debt mountain, the Daily Telegraph reported.
AGGREKO – The world’s leading temporary power provider aims to double its output in Ivory Coast to around 400 megawatts within two years to meet demand from the country’s rapidly growing economy, a senior company official said.
CIGARETTE FIRMS – Certain sections of the World Health Organisation are keen to categorise e-cigarettes as tobacco and regulate them as normal cigarettes, according to leaked documents seen by the Financial Times.