Source: Sharecast
The FTSE 100 ended the session up 0.09% at 7,467.38, while the FTSE 250 was off 0.52% at 20,893.19.
Sterling was in the red, last trading down 0.17% on the dollar at $1.3182, and weakening 0.08% against the euro to change hands at €1.1991.
“Equities continue to make headway today, countering some of the weakness we saw yesterday,” said IG chief market analyst Chris Beauchamp.
“Once again US stocks are leading, as the continuing war in Ukraine prompts investors to remain cautious about European equities.
“Meanwhile London has made some small gains, helped by further strength in yields which has boosted financial shares.”
Beauchamp said the longer the rally lasted, the more investors would return to the fold, as rising prices brought “new money” into the market.
“Despite all the negatives, stock markets seem content to move higher.”
The UK imposed fresh sanctions on a number of Russian businesses and individuals earlier on Thursday, including a private paramilitary organisation and the stepdaughter of the Kremlin’s foreign minister Sergey Lavrov.
More than 1,000 individuals and businesses had now been sanctioned by Westminster since Russia invaded Ukraine at the end of February.
The latest companies to be sanctioned include Moscow-based Alfa-Bank; diamond miner Alrosa; defence drone maker Kronshtadt; and controversial mercenary provider the Wagner Group.
Individuals included Tinkoff Bank founder Oleg Tinkov; billionaire businessman and Putin confidant Eugene Markovich Shvidler; Sberbank chief executive Herman Gref; and Lavrov’s 16-year-old stepdaughter Polina Kovaleva, who owns a £4.4m property in Kensington.
Galina Danilchenko, the mayor of Ukraine’s Melitopol region, was also sanctioned for collaborating with the invading forces.
“These oligarchs, businesses and hired thugs are complicit in the murder of innocent civilians and it is right that the pay the price,” said foreign secretary Liz Truss.
“All those sanctioned today will have their assets in the UK frozen, which means no UK citizen or company can do business with them, and individuals subject to travel bans are also prohibited from travelling to or from the UK.”
The Bank of England, meanwhile, said it was considering delaying plans to tighten its capital requirements for banks amid economic concerns caused by Russia's invasion of Ukraine.
In an update on financial stability, it said UK lenders were financially strong and could withstand a period of severe stress, but added that economic uncertainty meant it may not be wise to increase cyclical capital requirements as planned in the second quarter.
Domestic risks had not changed since the BoE announced plans to raise banks' countercyclical capital buffer to 2% from 1%, it said.
The global outlook had become more uncertain, however, which could impact the planned announcement of the increase in the second quarter, and its subsequent implementation at the end of 2022.
"Uncertainty around, and downside risks to, the economic outlook have increased significantly following Russia’s invasion of Ukraine," the BoE's Financial Policy Committee said.
"Given this uncertainty, the committee will continue to monitor the situation closely and stands ready to vary the UK [buffer] rate - in either direction - in line with evolution of economic conditions, underlying vulnerabilities and the overall risk environment."
On the economic front, a closely-watched survey showed a slumping in business optimism earlier, as cost inflation soared to fresh highs.
The flash reading for March’s S&P Global/CIPS UK PMI composite index was 59.7 in March, against 59.9 in February and well above the 57.5 pencilled in by economists.
Within that, the services PMI business activity index hit a nine-month high of 61.0, up on February’s 60.5, boosted by strong demand for travel, leisure and entertainment following the relaxation of Covid restrictions.
But that was largely offset by weakness in the manufacturing sector, which was hit by ongoing supply shortages and greater caution from clients.
The output index fell to 52.6 from 56.9, while the PMI slipped to 55.5 from 58.0, a 13-month low.
Business optimism also tumbled, hitting a 17-month low, after escalating fuel, energy and staff costs resulted in the steepest rise in prices charged since the index began in November 1999.
Respondents also flagged concerns that the war in Ukraine could dent already-fragile supply chains and hurt customer demand.
“The outlook darkened as concerns over Russia’s invasion exacerbated existing worries over soaring prices, supply chains and slowing economic growth,” said Chris Williamson, chief business economist at S&P Global.
“The survey indicators point to potentially sharply slower growth in coming months, accompanied by a further acceleration of inflation and worsening cost of living crisis, which paints an unwelcome picture of stagflation for the economy in the months ahead.”
Elsewhere, UK retail sales growth slowed in March as living costs rose, with the Confederation of British Industry’s monthly retail sales balance falling to +9 from +14 in February, coming in below expectations for a reading of +10.
Retail sales were seen as "poor" for this time of the year, with the balance down to -23 in March from +16 the month before.
They were expected to remain below seasonal norms, but to a lesser extent, in April.
“Retailers had a mediocre March, with sales reported as being below seasonal norms,” said CBI principal economist Martin Sartorius.
“The cost-of-living crisis is looming large across the sector, as households’ wallets are being hit by the fastest rate of inflation in decades.”
In equity markets, M&G closed up 2.45% after it launched a £500m share buyback programme.
Bridgepoint Group jumped 9.84% after well-received results, while Games Workshop Group was 3.3% higher after an update.
Precious metals miner Fresnillo was ahead 5.73% as gold prices edged up, and Anglo-Russian precious metals miner Polymetal International leapt 20.73%.
“Gold is creeping higher again, adding to yesterday's gains which came in risk-averse trade,” said Oanda analyst Craig Erlam.
“The yellow metal remains well supported against the backdrop of high inflation and commodity price surges, not to mention waves of risk-aversion in these highly uncertain times.”
Energean was a high riser, closing up 4.06% after announcing its first dividend in 2022 and swinging to an operating profit, boosted by higher production and prices.
Operating profit for the year through December was $32.1m, compared with a loss of $124.6m a year earlier as revenue jumped to $497m from $28m.
Its pre-tax loss narrowed to $90.7m from $113.6m.
XP Power reversed earlier losses to eke out a rise of 0.03% by the close, after saying it might have to cough up $40m in damages as US-based Comet won a trade secret misappropriation lawsuit against the firm.
The stock was also trading without entitlement to the dividend, acting as another drag through the session.
On the downside, high-street stalwart Next slumped 3.26% after it reduced its profit guidance and predicted selling prices would rise by 8% in the second half of the year, despite reporting a more-than-doubling of annual profit.
Schroders was down 0.54%, Prudential lost 1.01%, Ferguson slid 3.25%, and Greggs was 0.17% cooler as they all went ex-dividend.
Watches of Switzerland Group was on the back foot by 3.76%, having gained on Wednesday following an initiation at ‘buy’ at Societe Generale.
Airlines were also in focus, with BA and Iberia owner IAG descending 2.22%, while Wizz Air climbed 0.27%, after both received rating downgrades at Deutsche Bank.
Market Movers
FTSE 100 (UKX) 7,467.38 0.09%
FTSE 250 (MCX) 20,893.19 -0.52%
techMARK (TASX) 4,330.45 -0.01%
FTSE 100 - Risers
Fresnillo (FRES) 767.60p 5.73%
Airtel Africa (AAF) 155.00p 2.65%
M&G (MNG) 221.50p 2.45%
British American Tobacco (BATS) 3,262.00p 2.23%
Hikma Pharmaceuticals (HIK) 2,122.00p 2.07%
United Utilities Group (UU.) 1,065.50p 1.96%
BAE Systems (BA.) 748.80p 1.88%
Whitbread (WTB) 2,739.00p 1.86%
Royal Mail (RMG) 361.10p 1.83%
Severn Trent (SVT) 2,926.00p 1.81%
FTSE 100 - Fallers
Ferguson (FERG) 10,840.00p -3.43%
Next (NXT) 6,176.00p -3.26%
Schroders (SDR) 3,150.00p -3.14%
JD Sports Fashion (JD.) 147.65p -2.61%
Coca-Cola HBC AG (CDI) (CCH) 1,596.50p -2.15%
Glencore (GLEN) 500.30p -2.13%
Howden Joinery Group (HWDN) 784.80p -2.07%
Barratt Developments (BDEV) 525.60p -2.05%
Pearson (PSON) 763.80p -2.03%
Smurfit Kappa Group (CDI) (SKG) 3,375.00p -1.98%
FTSE 250 - Risers
Polymetal International (POLY) 166.75p 21.27%
Homeserve (HSV) 810.00p 15.14%
Bridgepoint Group (Reg S) (BPT) 319.50p 10.36%
Ferrexpo (FXPO) 170.10p 5.85%
CMC Markets (CMCX) 274.50p 5.78%
Coats Group (COA) 81.40p 5.71%
Harbour Energy (HBR) 499.60p 5.31%
Convatec Group (CTEC) 218.50p 4.50%
Centamin (DI) (CEY) 91.02p 4.26%
Energean (ENOG) 1,178.00p 4.06%
FTSE 250 - Fallers
Weir Group (WEIR) 1,765.00p -6.54%
JTC (JTC) 815.00p -4.57%
Softcat (SCT) 1,692.00p -4.19%
Watches of Switzerland Group (WOSG) 1,124.00p -3.93%
Rank Group (RNK) 137.80p -3.91%
SDCL Energy Efficiency Income Trust (SEIT) 116.50p -3.72%
Trustpilot Group (TRST) 138.00p -3.43%
Urban Logistics Reit (SHED) 185.00p -3.39%
Vistry Group (VTY) 981.60p -3.34%
Molten Ventures (GROW) 704.00p -3.16%
