UK’s FTSE 100 rebounds but heads for worst week in a year

UK’s FTSE 100 rebounded on Friday as Western sanctions against Russia over its invasion of Ukraine were not as severe as investors had expected, but the blue-chip index was on course for it worst weekly performance since January 2020.

Banks and insurers rose 1.2% and 1.9%, respectively, leading the benchmark FTSE 100 1.1% higher in morning trade. It had slumped nearly 4% on Thursday.

While Western nations hit Russia with new sanctions including freezing bank assets and cutting off state-owned enterprises, they stopped short of disconnecting it from the SWIFT international banking system or targeting its oil and gas exports, which some analysts said helped markets recover.

“The markets are telling us that the sanctions aren’t particularly dramatic relative to what they could be,” said Russ Mould, investment director at AJ Bell.

“Some of it is people looking to buy on the dip and taking the alleged advice by financier Nathan Rothschild that you should buy on the sound of cannons and sell on the sound of trumpets.”

Precious metals rose 4.3%, led by a recovery in Russia-exposed miners Polymetal, EVRAZ and Petropavlovsk, which gained between 3% and 20%.

London-listed depository shares of Russian bank Sberbank Rossii PAO and Gazprom (MCX:GAZP) surged 60.1% and 4.9%.

The domestically focussed mid-cap index advanced 1.4%.

After hefty falls this week, Wizz Air (LON:WIZZ) gained 4.4%. The company has suspended all flight operations in Ukraine. Tobacco company Imperial Brands (LON:IMB) Plc, up 1.6%, also said it had suspended operations in Ukraine.

Energy supplier Centrica (LON:CNA) gained 3.4% after its adjusted profit for 2021 doubled.

Global education group Pearson (LON:PSON), up 8.6%, said it would launch a 350 million pound ($468.20 million) share buyback.