Proactive Investors - The FTSE 100 has slipped further into the red with jitters surrounding events in Russia over the weekend adding to investors concerns surrounding economic growth and rising interest rates.
The blue-chip index is now down 40 points at 7,422.
Jim Reid, strategist at Deutsche Bank (ETR:DBKGn), said: “It could increase the risk of escalation by Mr Putin to reinstate an air of authority, or it could leave him vulnerable which could be seen as positive or negative for Europe, Ukraine and wider markets.
It’s just impossible to tell at this stage.”
BAE Systems (LON:BAES) topped the FTSE 100 fallers, down 2.2%, as the probability of an earlier end to the war in Ukraine rose while banks were uniformly weak as they came under further pressure to act on mortgage and savings rates.
In Europe, Italian defence group Leonardo, Sweden’s Saab, Germany’s Rheinmetall and France’s Dassault Aviation were all down more than 3%.
Neil Wilson at markets.com said: “The aborted mutiny in Russia underscores weaknesses in the Putin regime and illustrates that there are probably a range of ways this conflict could end sooner than we had thought before.”
Banking stocks weakened. Barclays PLC (LON:BARC) fell 2.1%, Lloyds Banking Group PLC (LON:LLOY) dipped 1.8%, NatWest Group PLC (LON:NWG) slipped 1.4% while Standard Chartered PLC (LON:STAN) was 1.3% lower.
JP Morgan downgraded Lloyds to ‘underweight’ and cut its price target to 42p from 56p.
Meanwhile, consumer finance champion Martin Lewis called on the high street lenders to do more on narrowing the gap between mortgage rates and savings rates.
BT Group PLC (LON:BT) was another share on the wane, down 1.1%, after it apologised for problems with the 999 emergency service over the weekend.
FTSE 100 slips but Aston Martin powers ahead
The FTSE 100 edged lower in early exchanges as investors digest the dramatic events in Russia over the weekend while Aston Martin motored ahead after striking an EV deal.
At 8.15am, London’s lead index fell 15.75 points, or 0.2%, to 7,446.12 while the FTSE 250 was little changed at 18,065.30.
Strategists at Deutsche Bank said: “Markets will start the week trying to work out what to make of the volatile situation in Russia that saw a remarkable turn late Friday and into Saturday.”
“In truth perhaps the mutiny and then truce, all within 24-36 hours means more political instability longer-term than shorter-term,” Deutsche felt.
Brent crude rose around 0.5% to US$74.29/barrel.
Back on home shores and Aston Martin Lagonda Global Holdings PLC (LSE:AML) hit top gear after unveiling an electric vehicle deal with US firm, Lucid Group Inc (NASDAQ:LCID).
The high performance car manufacturer has joined forces with Lucid to enter a supply agreement to create “industry-leading ultra-luxury high performance electric vehicles.”
Aston will issue 28.4mln shares to Lucid and make cash payments of around £182mln. Lucid will hold a 3.7% stake in Aston.
Shares jumped 10.5%.
Associated British Foods PLC (LON:ABF) were little changed despite raising profit guidance.
Operating profit should come in “moderately ahead of last year,” ABF said in a statement, up from previous guidance that the figure would be flat.
Earnings per share should “benefit” too from a lower-than-expected group effective tax rate, ABF added, after total group sales came in 16% higher year-on-year at £4.7bn in the third quarter.
Analysts at Shore Capital described the update as “pleasing,” and raised its EPS forecast by 6.5% to 140.3p.
“Following a pleasing update, we reiterate our buy stance on ABF equity, seeing scope for capital appreciation for underlying growth and rating expansion in forthcoming periods,” the broker said.
AB Foods lifts profit guidance
Primark owner Associated British Foods PLC (LSE:ABF) has guided that full-year profits should be higher after reporting jumps in both food and retail sales during the third quarter.
Operating profit should come in “moderately ahead of last year,” ABF said in a statement, up from previous guidance that the figure would be flat.
Earnings per share should “benefit” too from a lower-than-expected group effective tax rate, ABF added, after total group sales came in 16% higher year-on-year at £4.7bn in the third quarter.
Retail sales grew 13% to just shy of £2bn in the 12 weeks to May, with Primark’s “summer ranges performing well” as warmer weather hit Europe.
Cineworld to appoint administrator in the UK
Cineworld Group PLC (LON:CINE) has announced plans to place itself into administration in the UK as it edges closer to exiting Chapter 11.
The process will only apply to Cineworld Group PLC itself (as the listed parent company of the group) and not to any of the operating companies or subsidiaries in the rest of the firm, which will continue to operate as usual without interruption.
The embattled cinema chain said it plans, once administrators are appointed, to transfer the assets from Cineworld Group PLC (LSE:CINE) to its wholly owned subsidiary, Crown UK Holdco Limited, a newly incorporated company to be controlled by the group's lenders.
The plan is part of efforts to allow the business to emerge from Chapter 11 as a continued going concern. It will not achieve a rescue of Cineworld Group PLC (LSE:CINE) itself.
Shares in Cineworld will be suspended once an administrator has been appointed.