FTSE 100 lost 0.2% to 7,571 on Thursday as investors reacted to the latest comments from the Federal Reserve and a further sanctions on Russia.
The negativity was evident across Europe with most major indices trading down on the day.
“European markets started in fairly sober mood – with UK stocks no exception – unsurprising perhaps given some tough rhetoric from the US Federal Reserve on interest rates and the latest round of sanctions imposed by the West on Russia yesterday,” said AJ Bell investment director Russ Mould.
Shell
Shell revealed the impact of Russia through the announcement of a increase in its write-down from $3.4bn to almost $5bn due to its exit from Russia hurting the oil and gas company’s shares.
Shell announced the increase in its write-down earlier today, however, increases in oil prices have been helping the company’s shares gain traction. Among oil and gas companies, BP has also taken a hit due to continued relations with Russia.
Shell shares lost 1.5% to 2,105p following the write-down announcement.
BP shares fell 0.7% to 378p as its connections to Russia remain intact and investors look to “what it might imply for its much larger Russian footprint,” according to Russ Mould, Investment Director, AJ Bell.
Oil prices gained 1% to nearly $102 per barrel on Thursday, which might be the reason why BP and Shell’s losses have been contained.
Halifax confirmed the 1.4% growth in housing prices assessed by the Housing Price Index (HPI). The jump of 1.4% is the largest increase in housing prices in the last 6 months.
The average house price has reached a new record high of £282,753, and “continues to defy gravity” said Mould.
“The dynamics of insufficient supply and strong demand continue to underpin prices, but you have to believe that will change at some point and, when the market turns, it could be painful.”
Along with rising house prices driving housebuilder shares to fall, the Building Safety Pledge by the UK Government is aiding the fall in stock prices.
The cost of remediating for Barratt’s building safety pledge will amount to roughly £400m which is driving Barratt Developements’ share down 3% to 514p.
Persimmons shares fell 1.4% to 2,206p as the company also signed the UK government pledge on Wednesday, which aims to ensure the safety of high-rise buildings. However, rising house prices aren’t helping the company, either.
Aviva shares fell 4% to 426p and abrdn shares dropped nearly 3% to 205p as the stocks were declared ex-dividend, making them the top fallers of the FTSE 100.
Entain shares fell 0.5% to 1,614p despite the company reporting a strong start to 2022 with net gaming revenue of 31% in Q1 2022, supported by the easing of Covid-19 restrictions.
“Entain has become a big beast of a player in the gambling world, and it continues to shoot for the moon in terms of ambitions,” said Mould.
“Never content with making the most of what it already has, the group continues to spread its tentacles with the recent launch of an innovation hub called Ennovate to develop next generation immersive entertainment services.”
Airtel Africa led the FTSE 100 performers with its shares gaining 2.5% to 142p as the company enjoyed the reaction from the market to its adopted regulatory SIM card measures at its Nigeria telecommunications unit.
AstraZeneca shares increased 1.3% to 10,599p as the follow-up results from the Phase III Champion-MG trial showed that Ultomiris demonstrated long-term efficacy in adults with generalised myasthenia gravis, a rare and chronic autoimmune neuromuscular disease that leads to a loss of muscle function and severe weakness.
BT Group gained 2% to 190p and Ocado shares rose 2.5% to 1,233 as the companies enjoyed a rebound.
SSE shares rose 0.5% to 1,814p as the UK Government launched a long-term strategy for secure and sustainable power.
