London stocks were firmly trending negative last week, and the falls have continued. This comes in the wake of the ongoing invasion of Ukraine by Russia, with Russia increasing bombings and over 1.5 million Ukrainian refugees fleeing the country.
The Financial Times Stock Exchange 100 Index (FTSE 100) was down to 6890, a significant drop from the 7600 figures posted just weeks ago. In addition, the FTSE 250 is also seeing similar volatility.
However, there was mixed news for the pound sterling as a whole, trading lower against the dollar by 0.53% but higher against the euro by 0.07%.
This financial news is not unrelated to the conflict despite being so far away geographically. More and more western companies are suspending operations in Russia each day through sanctioning measures.
Fashion website Boohoo.com said they are “deeply concerned” about the ongoing situation. Distilling company Diageo, most well known for producing Smirnoff vodka and Guinness, has paused exports to both Russia and Ukraine as the war escalates, saying “our priority is the safety of our people in Ukraine and the wider region.”
As more UK-based companies like this cease trading in the giant Russian market, and indeed this area of Europe as a whole, the London stock market could fall even further. No company wants to be on the perceived “wrong” side of this conflict and are making financial decisions carefully, even if it is at a loss to them.
What’s more, the UK government itself is taking more action against Russian companies. A number are now suspended from the London Stock Exchange and banned from the UK insurance market. This will affect the Russian aviation and space industries the most, with companies being banned from accessing British-based insurance both directly and indirectly.
The London Stock Exchange has also announced that it has suspended trading in global depository receipts of several Russian companies, including big names such as Gazprom, Rosneft, En+ and Sberbank.
With investors keeping a close eye on the Russian situation and dealing with fast-coming financial news, it’s perhaps no wonder that London stock figures this week are low and fluctuating.