The FTSE 100 took a blow of 1.1% in late morning trading on Thursday, as oil prices whipsawed in choppy trade and Rio Tinto announced they would break ties with Russia and paid a bumper dividend.
The price of oil rose on Thursday following a 17% drop on Wednesday, after the UAE considered pushing OPEC to increase its agreed output to ease supply fears.
“Wild swings in oil overnight reflect the febrile nature of markets right now and also just how little visibility investors have,” says AJ Bell investment director Russ Mould.
European shares were also heavily hit and extended declines after the ECB said they would accelerate the winding down of asset purchases.
Rio Tinto
Rio Tinto announced its decision to sever all ties to Russian business operations, including its joint-venture between the company and Russian oligarch Oleg Deripska’s company, Rusal.
Rio Tinto confirmed it was “in the process of terminating all commercial relationships it has with any Russian businesses.”
The decision also brought Rio Tinto’s Oyu Tolgoi project in Mongolia into doubt, due to the venture’s reliance on Russian diesel.
Rio Tinto shares were down 5.8% on Thursday as the company went ex-dividend. Antofagasta, Glencore and Fresnillo shares were up 5%, 2.8% and 1.6% respectively.
However, Russian focused miners Polymetal and Evraz sank as the UK imposed further sanctions on Russia and Oligarchs.
“From a Western perspective the war in Russia is very much an economic one and the full ramifications may not be known for quite some time,” said Mould.
Evraz shares are down 23% to 71p after UK government accused the mining company of providing support to Russia in the war against Ukraine by supplying steel to the Russian military for the production of their tanks. Roman Abramovich, major shareholders in Evraz is one of 7 Russian oligarchs who was sanctioned today.
Evraz shares were suspended by the LSE as a result of the sanctions.
Spirax-Sarco
Spirax-Sarco shares are trading up 3% after the firm exceed pre-pandemic sales by £100m to £1.3bn in 2021. Spirax-Sarco enjoyed higher demand as their customers recovered from the pandemic. Spirax-Sarco also announced an increase of 18p in their total dividends to 136p for 2021.