LONDON: UK’s FTSE 100 ended higher on Wednesday as shares of oil and industrial mining giants received a boost from soaring commodity prices in the wake of the intensifying Russia-Ukraine crisis.
The commodity-heavy FTSE 100 ended 1.4% higher with oil heavyweights Shell and BP, and miners Glencore and Rio Tinto the top gainers on the index.
Commodities including oil, steel and aluminum all rose on Wednesday over rising supply concerns amid Western sanctions on Russia. Oil prices surged beyond $110 per barrel for the first time since 2014, pushing oil stocks to record their best single day gain since January.
Meanwhile, soaring crude oil prices are lowering the outlook for real economic growth and central banks can do little to address the situation, said Peter Garnry, head of equity strategy at Saxo Bank.
Bank of England policymaker Michael Saunders said on Tuesday the Ukraine crisis is likely to push Britain’s soaring inflation higher, but that it is too soon to determine the impact on monetary policy.
“This looks like a trend that is only likely to get worse with significant consequences for global supply of key raw materials as well as demand for goods and services, as everything becomes more expensive,” said Micheal Hewson, chief market analyst at CMC Markets UK.
Investors were focused on comments from the Bank of England (BoE), with Deputy Governor for Financial Stability Jon Cunliffe due to give a speech at 2000 GMT.
The domestically focussed mid-cap index rose 1.3% with travel and leisure stocks leading gains.
Among stocks, Russian gold and silver producer Polymetal rose 18.5% to the top of the FTSE 100 after shedding over 80% in the past two sessions. It suspended its 2022 cost and capital expenditure outlook amid the conflict in Ukraine.
Persimmon Plc gained 2.1% after Britain’s second-largest homebuilder said it expected to build 4-7% more homes in 2022, riding on strong housing demand.
London-listed shares of Russia’s Sberbank plunged 78.4% after the European arm of Russia’s largest bank was forced to close.