London stocks tumble amid heightened Russia-Ukraine tensions

British stocks plunged on Monday as concerns over a Russian invasion of Ukraine hit the FTSE 100 index, with airlines and banks among the biggest fallers as investors rushed towards safer investments. The UK's blue-chip index fell as much as 2 per cent in early morning trade, erasing nearly all its year-to-date gains and taking the index to its lowest point in two weeks, with the biggest indexes in Germany and France falling 3.5 per cent. “The prospect of war is rarely good for stock markets, and so the new trading week has begun on a bad note across Europe and Asia as investors fear the alarm clock is about to sound on a physical battle between Russia and Ukraine,” said Danni Hewson, financial analyst at AJ Bell. “Should Russia go to war with Ukraine, there is no telling how long the battle will last, and the damage wrought on the stock market.” More than £54 billion ($73bn) was wiped from the value of London's top 350 companies on the FTSE 100 and FTSE 250 just a couple of hours after markets opened on Monday morning. Fears of a possible conflict battered most stock markets last week, with the alert level raised at the weekend after the US warned that that Russia could invade Ukraine at any time, with Moscow reportedly amassing more than 100,000 troops near the border. Airlines were among the FTSE 100's biggest fallers, with British Airways owner IAG down 6.28 per cent at 11.41am London time, as the prospect of war threatens to hamper the aviation sector’s already fragile recovery. Wizz Air, which operates the second highest number of flights between Ukraine and Europe after Ireland's Ryanair , dropped 8 per cent on the FTSE 250. Banking stocks were also down, with Barclays down 5 per cent as investors steered away from riskier assets in the face of uncertainty. The biggest loser on the FTSE 100 by far, however, was steel producer Evraz, which lost more than a third of its value — an unusually big drop for such a large firm. The global company has a large number of assets in Russia, with the drop enough to wipe around £650 million off the value of the shares held by Chelsea owner Roman Abramovich — Evraz's biggest shareholder. British energy stocks fell the least as oil prices climbed on the prospect of supply disruptions caused by any escalation over Ukraine. However, shares in oil major BP were down more than 3 per cent because the business has a nearly 20 per cent stake in Russian energy giant Rosneft. “With worries that inflation is already running far too hot, the possibility Russia troops could move across the border has led to another surge in the oil price to above $95 a barrel, edging up towards $96, a level Brent crude has not been at since 2014,” said Susannah Streeter, an analyst at investment platform Hargreaves Lansdown. “Energy markets are clearly on edge and if supplies are threatened there is a risk oil will shoot up even higher, adding to price pressures for companies.” Meanwhile, sterling fell against a stronger dollar in early trading on Monday as the possibility of war in Ukraine ramped up, as "riskier" currencies such as the Australian dollar struggled. The US dollar, which is seen as a "safe haven", strengthened. The pound was down 0.5 per cent against the dollar at $1.3498 at 9.02am London time, a one-week low, before paring back later in the morning. “Should markets move to price in more geopolitical risk, cable may well break below the 1.3500-1.3600 range that has held since the start of February,” said ING strategists. “At the same time, we think that this week’s data flow in the UK should continue to support Bank of England tightening expectations.” UK jobs and wages data is due on Tuesday, with inflation data for January set for release on Wednesday and retail sales data expected on Friday. “While there might be upside risks to the jobs and wages data, given the BoE is better positioned for these risks we expect a less volatile reaction to the UK data this week with [US Federal Reserve] speculation and events in Ukraine perhaps more important influences,” Derek Halpenny, head of research at MUFG, wrote in a research note.

London stocks tumble amid heightened Russia-Ukraine tensions

British pound dips 0.5% against the US dollar in early morning trading