FTSE 100 Live: Oil price highest since 2008, shares slide continues

Brent Crude has reversed the steep gains made in early trading this morning after German chancellor Olaf Scholz expressed opposition to suggestions by the US of a ban on imports of Russian oil. Earlier, US Secretary of State Anthony Blinken said he was in talks with European leaders over the ban.

The whipsaw in oil prices has nonetheless been a boost to Canadian energy companies, in particular those who drill for oil in North America, including Suncor and Cenovus Energy, which are up 2.3% and 2.9% respectively.

The Nasdaq dropped 1.4% in early trading, as investors weighed the withdrawal from Russia of yet more technology companies over the weekend including Visa, Mastercard and Netflix, as well as the potential squeeze on profits caused by a jump in the price of metals used in computer chips.

Distressed lender Amigo Loans has secured a welcome reprieve after the city watchdog said it would not oppose the firm’s revised compensation plans.

There were fears about the viability of Amigo’s renewed compensation scheme, which required the firm to raise at least £70m in equity funding, after its shares plunged on the back of the announcement in December.

But the Financial Conduct Authority’s move today, which saw the regulator reveal it would not attend the High Court to oppose the plans, appeared to offer relief to investors, who sent the penny stock’s shares up more than 70 per cent to 4.68p.

The decision comes as the FCA acknowledged that the supply of high cost credit products had reduced following events such as Provident Financial, Britain’s biggest doorstep lender, withdrawing from home credit. It told The Times it was talking to firms and individuals about the supply of credit to customers of the high-interest loan market.

Amigo, the nation’s largest guarantor loan provider, suffered a blow last year after it warned its future was under threat in the wake of a mis-selling scandal that led to a £345m compensation bill.

Its initial efforts to rectify the issue were rejected by the High Court in May last year, which viewed the proposed compensation scheme – which could have paid out as little as 10p for every pound owed - as insufficient.

But the new scheme, which could see customers getting as much as 42p for every pound owed, will now be put before the High Court over several hearings this month, beginning tomorrow.

The price of gold briefly topped $2,000 an ounce today as investors flocked to safe havens amid mounting fears of an escalating crisis in Ukraine.

Wheat futures reached a 12-year high of $1,294 per bushel, an increase of 68% over the past month, after closure of Ukraine’s ports and continued sanctions on Russia cut access to two of the world’s top 10 wheat producers.

Soaring metal prices have pushed up shares in two of the FTSE’s biggest mining stocks, Anglo American and Antofagasta, which are up 3.2% and 4.1% respectively.

Shares in defence company BAE systems jumped 6% in early trading this morning, nearing an all-time high after Boris Johnson vowed to send more defensive equipment to Ukraine.

The announcement came following a call between the prime minister and the Ukrainian president, Volodymyr Zelenskiy, held yesterday. Zelenskiy tweeted that Johnson was “informed about countering the aggressor” and the two “agreed on the next joint steps.”

The UK has already sent a range of defense and military equipment to Ukraine, including at least 2,000 anti-tank missile systems known as NLAWs, which are manufactured in Belfast.

Sterling has slid to its lowest level since December 2020, when the UK signed its Withdrawal Agreement with the EU.

The pound dropped to 1.315 against the US dollar in early trading this morning, the lowest the currency has reached in post-Brexit Britain, as investors moved into the US dollar amid fears of a worsening crisis in Ukraine.

The Euro has dropped 2.9% in the past week, as concern grows over mounting energy costs and knock-on effects to the European economy of sanctions on Russia.

Shares in care home owner CareTech leapt nearly 9% today after the high-profile entrepreneur Sheikh brothers who co-founded the firm confirmed a potential takeover bid.

Sheikh Holdings Group, the private family office of Farouq and Haroon Sheikh, said it was trying to form a consortium to buy the entire share capital of CareTech, pushing the stock up to 643.5p.

Sheikh Holdings already owns more than 2.3% of CareTech’s shares, making it the firm’s 14th largest investor.

According to Sheikh Holdings, CareTech has freehold assets in excess of £200m across more than 250 homes.

Farouq Sheikh, the group executive chairman at CareTech who received an OBE for his services to specialist social care in 2020, and Haroon, the chief executive, co-founded the company in 1993.

Tory peer Lord Barker has bowed to intense public pressure and quit the board of EN+, the Russian metals giant backed by sanctioned oligarch Oleg Deripaska.

EN+ said Lord Barker, who was the UK’s energy minister from 2010 until 2014, had resigned and would leave following a “short” handover period. The Conservative peer has chaired the board since 2017.

No reason was given for the departure but Barker has been buffeted by public calls for his departure in recent weeks, including from Defence Secretary Ben Wallace.

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Wizz Air has slashed its growth target after stopping the sale of flights to and from Russia and Ukraine as war between the two countries rages.

Wizz Air said it was extending a temporary pause into a full cancellation of services to and from the countries. Flights to Moldova will be diverted to Romania until the end of May.

It follows a decision by the company to pause flights to Ukraine and Russia on Wednesday after the closure of airspace.

The Hungarian budget airline today revised down its projected growth in seat capacity in 2023 from 52% to 30%.

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ALREADY rocky markets got even more turbulent today as investors fretted about soaring oil and gas prices and what that could do to inflation that already seem out of the control of central banks.

The threat of a possible ban on Russian oil imports sent the price of Brent Crude to its highest price since 2008 this morning and natural gas jumped to an all-time high.

Brent Crude reached $139 a barrel at one point, the highest since the financial crisis and 20% higher than it was on Friday.UK natural gas smashed records to hit 800p a therm this morning, before falling back.

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Shares in BT, Marks & Spencer and lenders NatWest and Lloyds were among domestic stocks dumped today as stagflation fears swept through the London market.

The latest selling by panicked investors saw a focus on stocks with exposure to the UK economy, leading the FTSE 250 index to fall as much as 4.5% at one point.

The oil and mining weighting of the FTSE 100 index limited the top flight’s decline to 1.9%, but some blue-chip stocks fell as much as 8% as the latest spike in energy and wheat prices darkened the economic outlook.

The clouds over consumer spending and corporate borrowing dented the banking sector in particular, with Lloyds the biggest faller and back below 40p for the first time in over a year after shares declined 3.24p to 39.8p.

It was less than a month ago that Lloyds and other lenders were priced sharply higher on expectations that interest rates will rise significantly this year in a boost to margins.

NatWest also retreated 6% or 11.9p to 190.6p and Barclays dropped 9.8p to 147.1p.

Other popular stocks under pressure included BT Group, which has now lost 15% over the past week after giving up another 3% today.

B&Q owner Kingfisher is trading at its lowest level since summer 2020 after falling 5% to 254p and Primark-to-sugar conglomerate Associated British Foods sank to its lowest level in nine years at one point.

Marks & Spencer, whose shares were riding high at 250p in January, fell another 7% or 11.45p to take the retailer back where it was in August at 145p.

With the gold price at $2,000 an ounce, investors took shelter in various miners including Centamin and Peru’s Hochschild Mining as their FTSE 250-listed shares rose 3%.

Shipping broker Clarkson was in demand after record results included underlying profits of £69.4 million and an increase in its dividend for a 19th consecutive year. Shares rose 190p to 3305p as the company expects favourable supply-demand dynamics to continue this year.