FTSE 100 gained 0.4% to 7,514 in early morning trade on Monday as investors looked to a potential ceasefire in Ukraine.
The Ukrainian President has signalled he is willing to explore options for peace and opened the door for negotiations with Russia.
In addition, fears around inflation subsided as oil fell after China announced the lockdown of Shanghai in a mass testing attempt to control the surge in Covid cases.
Brent Crude saw a 3.5% drop to $116 per barrel as investors feared production and imports on China’s end would be impacted with China’s largest city Shanghai under quarantine.
BP shares dropped by 0.5% and whilst Shell’s rose 0.1% as oil prices dipped.
“It almost feels like we’ve stepped back in time two years as lockdowns in China once again rock the markets,” says AJ Bell investment director Russ Mould.
“The two-day restrictions imposed in Shanghai are evidence that the pandemic is not yet over and inevitably, given the implications for global growth, have put oil prices under pressure.
“It was no surprise to see Asian stocks slump on the move as the region’s dominant economy is once again threatened by the sceptre of Covid-19.”
However, European markets seemed unfazed by the jump in China’s Covid cases and look to potential peace talks between Russia and Ukraine instead.
“The FTSE 100 is preferring to focus on renewed peace talks between Russia and Ukraine, amid hopes there can at least be a move towards an end in the fighting,” said Mould.
FTSE 100 Risers
IAG shares gained 2.9% to 141p as passengers returned to travel with summer approaching and Gatwick airport running 570 flights instead of 300 flights due to the reopening of its South terminal.
IAG is set to move from the North to the South terminal, aiding in flight frequency returning to pre-pandemic levels.
Reckitt Benckiser saw its shares increase by 2.7% to 5,600p as the company announced its divestment of Dermicool to Emami.
Natwest bought back 50% of its shares from HM Treasury, making them privately owned again, and the shares reflected a gain of nearly 2% to 225p.
“Elsewhere, Natwest is finally free of state control after well over a decade as the UK Government reduced its stake below 50%, though any champagne might have to be put on ice given the challenges facing the bank from the cost-of-living crisis and the risks of mounting bad debts.
“At least the company is having a happier Monday than its rival Barclays. The £450 million hit it announced after issuing too many financial instruments makes this a very expensive mistake and one which will both hit the company’s credibility and frustrate shareholders looking forward to a now delayed share buyback,” state Russ Mould.
AstraZeneca shares rose 1% to 9,950p following the latest announcement of Evusheld receiving market authorisation for the EU.
GlaxoSmithKline also saw a 1% rise to 1,640p with investors flocking to pharmaceutical shares as covid cases begin to rise again.
Aviva shares rose 3.1% to 451p on Monday morning as the Insurers stocks broke out to the highest levels since 2018.
FTSE 100 Fallers
Barclays saw its shares lose 3.2% to 161p after the bank announced to expect a £450m hit caused by the over-issuance of structured notes and exchange-traded notes.
Rolls Royce shares plummeted 9% to 99p on Monday morning after seeing prices as high as 110p on the close on Friday boosted by takeover rumours.
