The FTSE 100 fell on Tuesday as a large convoy of Russia troops approached the Ukrainian capital and the fallout of sanctions rippled through markets.
On a day the human tragedy of Ukraines invasion becomes ever more real, the impact of sanctions, and moves by western companies to disassociate with Russia, caused further volatility.
“Investors, like almost everyone else, have little insight into what happens next in Ukraine or how Russia might respond to what it perceives as provocations by the West,” said AJ Bell investment director Russ Mould.
Russians have been flocking to remove their cash from banks as sanctions froze Russian assets around then world. As savers rushed to withdraw their funds, the European arm of Russia’s largest bank Sberbank was on the verge of failing.
Economists have predicted that Russia’s GDP will fall by 5%.
With their Russian ties, Evraz and Polymetal are still facing the brunt of the investor selling and now face demotion from FTSE 100.
“After Russia invaded Ukraine and then stringent sanctions were imposed on Moscow, the fortunes of the Russia focused miners Evraz and Polymetal International have reversed dramatically. Shares in Evraz are down by 55% over the last five days, which translates into heavy losses for Roman Abramovich who owns a 30% stake in the company. Gold miner Polymetal has experienced an even more brutal swing downwards, falling by 75% since conflict broke out,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.
Abrdn
Abrdn shares dipped – overshadowed by wider market weakness – after the asset manager reported its first profit since the merger between Aberdeen Asset Manager and Standard Life.
Abrdn’s fee-based revenue is up 6% to £1.5bn and adjusted operating profit is up 47% to £323m. Pre-tax profit rose 33% to £1.1bn in 2021. Dividends remain the same as 2020 in 2021 at 14.6p.
Flutter
Flutter shares also suffered after the gaming company posted 2021 preliminary results that revealed the cost of US expansion.
Reported revenue increased by 37% as a result of the May 2020 merger with The Stars Group, but EBITDA decreased by 6% due to greater US investment and regulatory consequences.
Recreational clients are driving revenue growth, with 7.6 million average monthly players up 23%.
FTSE 100 risers
Rio Tinto saw a share price increase of 2.07% to 5,909.5p on Tuesday as it continued to ride the wave of positive news from its financial results for 2021.
The recently posted record dividends of $16.8 billion, which brought it to the second-highest FTSE 100 payout behind Vodafone’s $18 billion payout in 2014.
BAE Systems shares saw a 1.92% increase to 733.4p as Russia’s invasion of Ukraine resulted in a continued demand for arms contractor’s stock.
Shell
Shell shares were 1.2% weaker after the oil major said it would be ceasing its agreements with Russia oil and gas group Gazprom.
Gazprom fired its entire company of workers on the Nordsteam 2 pipeline following crippling sanctions against the country.