Markets crash as Ukraine tensions escalate

Sentiment in eastern Europe continued to leave its mark on markets all around the world on Thursday, causing London’s top shares to once again drop heavily into the red.

It is just days since the Kremlin claimed it planned to pull troops back from the border with Ukraine, sending markets soaring.

But escalation was once again on the cards as Moscow expelled a senior US diplomat and Washington warned Russia might invade within “several days”.

The Ministry of Defence meanwhile said that “Russia retains a significant military presence” and that the country “can conduct an invasion without further warning”.

There were clashes in the Donbas region of eastern Ukraine on Thursday, and the West worries that this might be Russia drumming up an excuse for invasion.

More than one thousand miles away in London traders were nervously watching the situation. They know that any escalation will be met by economic sanctions on Russia and a possible throttling of Russian gas coming into Europe.

That would affect the whole European economy.

The FTSE 100 closed down 0.9%, or 66.41 points, to 7,537.37.

Its drop was led by miner Evraz, which operates in Russia and elsewhere, British Airways owner IAG, and Shell, among others.

Its German cousin the Dax dropped 0.8% while Paris’s Cac 40 closed down 0.4%.

In New York the S&P 500 and Dow Jones had both given back 1.1% of their value shortly before markets closed in London.

The price of Brent crude oil dropped 2.7% to 92.28 dollars per barrel. Meanwhile the pound rose 0.03% against two major rivals to 1.3624 dollars or 1.1983 euros.

In company news, JD Sports said that it would delay its full-year results to buy enough time to figure out the impact of its sale of Footasylum.

The business was fined £5 million earlier this week over secret meetings around the £90 million takeover of Footasylum which the competition watchdog is now forcing it to unwind.

Auditors need “sufficient time to complete” their procedures, JD Sports said on Thursday. Shares remained practically unchanged.

Ocado shares rose by just 0.6% after striking a deal with a French retailer which will expand the firm’s offering in the country.

The online supermarket will now be able to offer its software to retailers across France for the first time.

The biggest risers on the FTSE 100 were Reckitt, up 345p at 6,152p; Fresnillo, up 28.6p at 695p; Standard Chartered, up 9.4p at 558p; SSE, up 21.5p at 1,605.5p; and Ocado, up 18p at 1,360.5p.

The biggest fallers on the FTSE 100 were Evraz, down 24.7p at 305.3p; Abrdn, down 10.1p at 231.7p; IAG, down 7.08p at 166.3p; Rolls-Royce, down 3.7p at 118.02p; and Imperial Brands, down 52p at 1,753.5p.