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(Alliance News) - European share prices were higher early Wednesday, after Western nations took a measured approach in imposing sanctions against Russia for move into rebel-held areas of Ukraine.
"It feels like we could get 'war' headlines at any moment; still the pullback in USDRUB, oil prices, and gold suggest that investors are satisfied that Russia's 'peacekeeping' incursion into eastern Ukraine will not escalate into a broader incursion into Ukraine," commented Stephen Innes of SPI Asset Mangement.
"However, the risk to this view is that with the severest sanctions avoided, for now, there is plenty of scope for on-the-ground escalation before NATO countries' firmest stance on sanctions materializes."
The FTSE 100 index was up 34.45 points, or 0.5%, at 7,528.66 early Wednesday. The mid-cap FTSE 250 index was up 155.97 points, or 0.7%, at 21,149.30. The AIM All-Share index was up 3.57 points, or 0.4%, at 1,035.19.
The Cboe UK 100 index was up 0.5% at 748.24. The Cboe 250 was up 0.6% at 18,923.49, and the Cboe Small Companies up 0.3% at 15,156.48.
In mainland Europe, the CAC 40 in Paris climbed 0.3%, while the DAX 40 in Frankfurt was 0.5% higher.
"Market mood is not cheerful but the softer-than-feared sanctions somewhat help," said SwissQuote analyst Ipek Ozkardeskaya.
UK Prime Minister Boris Johnson has been urged to impose tougher sanctions on Russia as Foreign Secretary Liz Truss said the government was already considering a number of further measures to stop Vladimir Putin's incursion into Ukraine.
Johnson is likely to come under fire in the Commons on Wednesday over the punishment doled out to Kremlin-linked oligarchs and banks in response to Russian aggression.
Writing in The Times, Truss said she had held a call with G7 allies to "agree the next package" of sanctions, while No 10 insisted there was more to come if Russia did not back down from manoeuvres in eastern Ukraine where troops had been sent into the Donbas region under the guise of being "peacekeepers".
In the FTSE 100, Barclays was the best performer at the open, up 3.0%, after the lender said it delivered a strong performance in 2021.
For 2021, total income edged higher to GBP21.94 billion from GBP21.77 billion in 2020, though net interest income was down slightly to GBP8.07 billion from GBP8.12 billion. Pretax profit almost tripled to GBP8.41 billion from GBP3.07 billion in 2020.
Barclays declared a total dividend of 6.0 pence, substantially higher than the 1.0p paid out in 2020. The bank also intends to initiate a share buyback of up to GBP1.0 billion, which is expected to commence in the first quarter of 2022.
At the other end of the large-caps, DIY retailer Kingfisher was the worst performer, down 2.8%, in a negative read-across from US peer Home Depot.
Dow 30 member Home Depot closed down 8.9% in New York on Tuesday. The Atlanta-based home improvement retailer expects gross profit margins to remain under pressure through the year as it grapples with supply-chain bottlenecks.
Rio Tinto was down 0.1%. The Anglo-Australian miner hiked its dividend to a record level for 2021, following a sharp rise in profit and revenue, driven by significant price rises for major commodities, more than offsetting a decline in output.
For the year, Rio reported a pretax profit of USD30.83 billion, doubled from USD15.39 billion in 2020, while underlying earnings before interest, tax, deprecation and amortisation rose 58% to USD37.72 billion from USD23.90 billion.
Consensus expectations had underlying Ebitda coming in at USD38.29 billion.
This was on sales revenue which grew 42% year-on-year to USD63.50 billion from USD44.61 billion. This figure was short of consensus expectations, which stood at USD65.12 billion.
In the FTSE 250, Unite Group was the best performer, up 8.3%, after the student accommodation provider saw a strong recovery in performance in 2021 and said it is well positioned for further growth.
For 2021, Unite swung to a pretax profit of GBP343.1 million from GBP120.1 million loss in 2020 on revenue of GBP266.9 million, up from GBP215.6 million.
Looking ahead, Unite said it expects to see strong demand in 2022 and 2023 as students return to campuses and government support for growth in international student numbers.
Aston Martin Lagonda was up 1.1%. The luxury automaker posted a sharp rise in annual revenue, boosted by significant growth in Americas and record sales in China.
For 2021, Aston Martin generated revenue of GBP1.10 billion, up 79% from GBP611.8 million in 2020, and its pretax loss narrowed by half to GBP213.8 million from a loss of GBP466 million.
Aston Martin's 2021 total wholesales were GBP6.18 billion, up 82% from GBP3.39 billion in 2020, as more normal operations were resumed following Covid-19 restrictions in 2020. The carmaker said its brand desirability is strong, pointing to retails outpacing wholesales.
In Asia on Wednesday, the Shanghai Composite was ended 0.9%, while the Hang Seng index in Hong Kong was up 0.4%. The S&P/ASX 200 in Sydney closed up 0.6%. Financial markets in Japan were closed for the Emperor's Birthday holiday.
The pound was quoted at USD1.3604 early Wednesday, firm from USD1.3595 at the London equities close Tuesday.
The euro was priced at USD1.1334, down from USD1.1344. Against the Japanese yen, the dollar was trading at JPY115.04 in London, up from JPY114.94.
Brent oil was quoted at USD96.90 a barrel Wednesday morning, firm from USD96.70 late Tuesday. Gold stood at USD1,895.84 an ounce, soft from USD1,900.36.
In Wednesday's economic calendar, there is eurozone inflation data at 1000 GMT.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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