London stocks were little changed by midday on Tuesday after a choppy start, as surging oil and gas prices stoked stagflation fears.
The FTSE 100 was up just 0.1% at 6,963.61, with oil and gas prices sharply higher after Russia threatened to halt gas supplies to the West through the Nord Stream 1 pipeline.
Investors were also mulling a report suggesting that the EU is considering a joint bond sale to fund energy and defence.
Russ Mould, investment director at AJ Bell, said: “It’s hard to believe that just a fortnight ago a full Russian invasion was considered the worst end of a range of scenarios, oil was trading at less than $100 per barrel and Germany’s defence strategy had not been transformed from a long dovish to a much more hawkish posture.
“The costs of isolating Russia through sanctions continue to bite, with a threat from the Kremlin to cut off gas supplies. There is also continuing talk about an oil import ban, even if European countries seem reluctant.
“Stagflation, an ugly mix of inflation and recession, is the fear stalking the markets right now and the longer the war rages, the more likely this scenario becomes.
“Meanwhile gold’s safe-haven credentials have been burnished by this crisis as the precious metal trades above $2,000 per ounce.”
In equity markets, Russian steelmaker Evraz and gold miner Petropavlovsk – which has operations in Russia – were both sharply higher as investors stepped in to pick up a bargain after recent heavy losses.
M&G rallied after it announced a £500m share buyback as the investment manager posted reduced annual operating profit resulting partly from changes to the expected death rate.
Fresnillo shone as the precious metals miner posted a jump in full-year profit and revenues, thanks in part to higher silver prices.
Flexible workspace provider IWG surged after announcing, alongside its full-year results, the merger of its digital assets with The Instant Group with a view to listing the business in the next two years.
Broadcaster ITV was a high riser after an upgrade to ‘outperform’ at Bernstein.
On the downside, high street bakery Greggs tumbled after it warned of significant cost headwinds in 2022 from inflation and higher commodity prices.
Travis Perkins was also in the red after a downgrade to ‘hold’ at Jefferies.
FTSE 100 (UKX) 6,963.61 0.06%
FTSE 250 (MCX) 19,330.29 0.84%
techMARK (TASX) 4,031.89 -0.83%
FTSE 100 – Risers
Evraz (EVR) 93.00p 20.78%
M&G (MNG) 199.05p 11.64%
ITV (ITV) 79.74p 8.58%
Fresnillo (FRES) 793.20p 7.28%
International Consolidated Airlines Group SA (CDI) (IAG) 123.72p 6.43%
Rolls-Royce Holdings (RR.) 93.32p 5.79%
Phoenix Group Holdings (PHNX) 611.40p 5.09%
Standard Chartered (STAN) 472.10p 4.82%
Legal & General Group (LGEN) 250.10p 4.69%
Lloyds Banking Group (LLOY) 43.06p 4.38%
FTSE 100 – Fallers
Polymetal International (POLY) 158.15p -8.35%
Ocado Group (OCDO) 1,097.00p -7.07%
Rightmove (RMV) 624.20p -4.26%
B&M European Value Retail S.A. (DI) (BME) 547.60p -4.06%
Vodafone Group (VOD) 116.38p -3.75%
Relx plc (REL) 2,133.00p -3.61%
Rentokil Initial (RTO) 455.30p -3.39%
Intertek Group (ITRK) 4,801.00p -3.23%
Sage Group (SGE) 640.20p -3.09%
Experian (EXPN) 2,742.00p -3.04%
FTSE 250 – Risers
Petropavlovsk (POG) 3.30p 32.00%
Hochschild Mining (HOC) 139.70p 13.03%
IWG (IWG) 258.50p 11.23%
TUI AG Reg Shs (DI) (TUI) 195.55p 7.83%
Weir Group (WEIR) 1,613.00p 5.77%
Morgan Sindall Group (MGNS) 2,160.00p 5.62%
Ferrexpo (FXPO) 122.20p 5.34%
Just Group (JUST) 79.50p 5.30%
TBC Bank Group (TBCG) 946.00p 4.99%
Playtech (PTEC) 590.50p 4.79%
FTSE 250 – Fallers
Greggs (GRG) 2,163.00p -5.26%
Clarkson (CKN) 3,210.00p -4.18%
Baillie Gifford US Growth Trust (USA) 192.00p -3.90%
XP Power Ltd. (DI) (XPP) 3,460.00p -3.89%
Liontrust Asset Management (LIO) 1,102.00p -3.84%
TI Fluid Systems (TIFS) 186.00p -3.73%
Fidelity China Special Situations (FCSS) 246.00p -3.53%
Allianz Technology Trust (ATT) 236.00p -3.28%
Network International Holdings (NETW) 174.85p -3.24%
Baillie Gifford Shin Nippon (BGS) 155.00p -3.13%