Valentine’s heartbreak for London traders as Ukraine fears grip global markets

Traders in London joined a global sell-off sparked by fears over tensions in eastern Europe on Monday.

For the second time in just three weeks fears that built over a weekend led to major drops in markets around the world.

In London the FTSE 100 ended the day down 1.7%, after trading as much as 2.3% lower earlier in the day.

The 129.43 point drop to 7,531.59 was slightly better than the Monday three weeks ago when the index dropped nearly 200 points.

But it wiped out more or less all the gains that the FTSE made last week, when markets were buoyant.

It came as politicians warned that war between Russia and Ukraine could be close.

During the day Prime Minister Boris Johnson said the situation is “very, very dangerous” and called on Russian leader Vladimir Putin to step back from “the edge of a precipice”.

Chris Beauchamp, chief market analyst at online trading platform IG, said: “Friday’s slump has carried over into the new week, and it looks like the weakness in stocks is with us for a while yet.

“As yet the situation in eastern Europe remains tense but peaceful, but markets are continuing to fret that tensions may spill over into a more serious crisis.

“The Ukraine news comes at a time when the market is ill-disposed to cope with bad news of any kind, and is in many ways much harder to quantify in terms of its economic impact, and thus promises to darken the outlook for stocks in a way that is more reminiscent of the first weeks of the Covid crisis rather than any other crisis since then.”

Michael Hewson, an analyst at CMC Markets, said: “Whichever way the chips fall, airlines have come under the most pressure, with British Airways owner IAG leading the fallers, although Wizz Air has also seen steep falls given its broader exposure to eastern Europe.”

In New York the S&P 500 had dropped 0.2% while the Dow Jones was trading down 0.6% around the time that markets closed in Europe.

In Germany the Dax closed down 2.2% while France’s Cac 40 dropped 2.7%.

On currency markets Sterling performed well. It was up 0.06% against two major rivals and by close of play in London one pound could buy 1.3521 dollars or 1.196 euros.

In company news, NatWest announced that it was closing 32 branches, mainly in England, as customers switch to online services.

Its shares closed down 4.1%, but the losses had been made before the announcement and came as other banks also faced a sell-off.

Shares in Frasers Group also fell, by 3.5%, as Studio Retail Group, in which Frasers has a big stake, was set to call in administrators.

The business has struggled to pay off a £25 million loan, and its shares were suspended from trading.

It issued a second profit warning in two months in January due to transport delays and rising shipping costs.

Fellow retailers JD Sports and Footasylum were hit with a combined £4.7 million fine as the competition watchdog said they had exchanged commercially sensitive information during a planned merger.

This goes against rules set by the regulator, and JD Sports bosses admitted inadvertent errors.

Shares in JD Sports fell by 3.5%.

The biggest risers on the FTSE 100 were Fresnillo, up 43.4p to 665.8p, Polymetal, up 22p to 1,131.5p, Antofagasta, up 23p to 1,389.5p, British American Tobacco, up 40.5p to 3,409p, and Anglo American, up 38p to 336.6p.

The biggest fallers on the FTSE 100 were Evraz, down 129p to 315.5p, United Utilities, down 10p to 164.8p, Barclays, down 11p to 195.56p, Aveva, down 121p to 2,678p, and Melrose Industries, down 7p to 152p.