Stocks in London on Wednesday closed higher on Wednesday, as hopes grow on a diplomatic solution to Russia's invasion of Ukraine, reflected by a surge from Russia-linked stocks and a fall from gold stocks.
Russian President Vladimir Putin and German Chancellor Olaf Scholz on Wednesday discussed diplomatic ways to settle the Ukraine conflict and the implementation of humanitarian corridors to evacuate civilians, the Kremlin said.
‘In the context of the developing situation around a special military operation to protect Donbas, various political and diplomatic efforts have been discussed, in particular a third round of talks between a Russian delegation and representatives of the Kyiv authorities,’ the Kremlin said in a statement, referring to eastern Ukraine.
The Kremlin said that the two leaders discussed ‘the humanitarian aspects of the situation’ in Ukraine and separatist regions.
Putin informed Scholz of measures being taken to evacuate civilians and ‘attempts of fighters of nationalist groupings’ to scupper those plans.
The FTSE 100 index closed up 226.61 points, or 3.3%, at 7,190.72. The mid-cap FTSE 250 index closed up 851.58 points, or 4.4%, at 20,069.20. The AIM All-Share index closed up 23.46 points, or 2.4%, at 986.71.
The Cboe UK 100 index ended up 2.7% at 713.01. The Cboe 250 closed up 3.9% at 17,584.72, and the Cboe Small Companies finished 1.8% at 14,396.04.
In Paris the CAC 40 ended 7.1% higher, while the DAX 40 in Frankfurt surged 9%.
In the FTSE 100, Evraz and Polymetal International - Russian stocks that have suffered from the invasion - ended up 19% and 63%, respectively. Russian gold miner Petropavlovsk ended up 8.3%.
On Wednesday, they said they do not consider themselves to be affected by Russian sanctions. The metals and mining companies said separately that they do not believe themselves to be an ‘entity owned by, or acting on behalf or at the direction of any persons connected with Russia’.
Electrocomponents closed up 12% after the electronic products supplier said it expects annual revenue and adjusted operating profit margin to be ahead of market estimates, due to a strong trading performance.
In the nine weeks to March 4, revenue grew 22% on a like-for-like basis compared to a year ago. In the financial year to date - the company's financial year ends on March 31 - revenue is up 25%, also on a like-for-like basis.
As a result of its progress, Electrocomponents expects revenue and adjusted operating profit margin for the financial year ending March 31, to be ahead of the top end of the current consensus range.
Prudential rose 8.6% after the insurer reported ‘high-quality, resilient growth’ and raised its dividend.
For 2021, pretax profit slipped by 5.0% to $3.02 billion from $3.18 billion in 2020. New business profit, however, rose by 13%, however, to $2.53 billion from $2.20 billion. It was a revival of fortunes for the insurer, as its new business profit in Asia had fallen 38% in 2020.
The company raised its annual payout by 7.0% to 17.23 cents per share from 16.10 cents. Its second interim payout alone was up 11% to 11.86 cents.
At the other end of the large-caps, Mexican precious metal miner Fresnillo ended the worst performer, down 7.3%, tracking spot gold prices lower.
Gold stood at $2,000,80 an ounce at the London equities close, depreciating against $2,056.80 late Tuesday, as risk-off sentiment waned. Midcap peers Centamin and Hochschild lost 9.6% and 6.8% respectively.
In the FTSE 250, National Express closed up 26% after smaller transport operator Stagecoach accepted a new cash takeover offer and no longer recommends the all-share merger previously agreed with National Express.
The Perth, Scotland-based bus and train operator on Wednesday said its directors unanimously recommend a new £594.9 million cash offer from Pan-European Infrastructure III, an infrastructure fund managed and advised by DWS Infrastructure.
Stagecoach shares gained 36%.
They no longer recommend a previously agreed all-share merger with Birmingham-based National Express. That deal, struck back in December, would have created a £1.9 billion market-cap public transport provider, though it was being reviewed by the UK Competition & Markets Authority.
DWS will offer Stagecoach shareholders 105 pence in cash, which is a 37% premium to its closing price on Tuesday. It was trading at 104.5p around midday on Wednesday.
Under the National Express merger offer, Stagecoach shareholders would have received 0.36 of new National Express share for each Stagecoach share. National Express noted the announcement and asked Stagecoach shareholders to take no action.
The pound was quoted at $1.3165 at the London equities close, up from $1.3110 at the close Tuesday.
The euro stood at $1.1070 at the European equities close, up sharply from $1.0890 late Tuesday, ahead of the European Central Bank's interest rate decision on Thursday.
Soaring inflation has put the ECB under pressure to follow its peers in the US and UK by moving to end its economic stimulus and raise interest rates soon. However, the conflict in Ukraine has threatened to derail the eurozone's recovery given the continent's reliance on Russian oil and gas.
More than two million people have fled Ukraine since Russia launched its full invasion less than two weeks ago, the United Nations said Tuesday.
Against the yen, the dollar was trading at JP¥115.77, up from JP¥115.62 late Tuesday.
Stocks in New York were rebounding strongly at the London equities close as traders bet on an improving outlook to the war in Ukraine and its effects on commodity prices.
The DJIA was up 1.9%, the S&P 500 index up 2.4% and the Nasdaq Composite up 3.3%.
On Wall Street, McDonald's was trading 1.3% higher after announcing Tuesday it would close all restaurants in Russia. Further, Coca-Cola was up 0.2% and Starbucks gained 3.4% after the chains also said they would halt operations in the ostracised country.
Brent oil was quoted at $121.55 a barrel at the equities close, down sharply from $132.65 at the close Tuesday.
The economic events calendar on Thursday has the latest weekly jobless claims numbers at 1330 GMT.
The UK corporate on Thursday has annual results from steam management systems manufacturer Spirax-Sarco Engineering and contract-for-difference provider IG Group. There are also trading statements from online fashion retailer boohoo and packaging firm DS Smith.
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