London: Oil, banking stocks drag FTSE 100 lower as Ukraine tensions weigh

[BENGALURU] UK shares fell on Thursday (Feb 17) after reports of attack on Russia-backed rebels by Ukrainian forces left investors unnerved, while weaker crude prices hit energy stocks and Standard Chartered's profit miss weighed on banking stocks.

The blue-chip FTSE 100 declined 0.7 per cent, extending losses from Wednesday, after data showed consumer prices rose at the fastest annual pace in nearly 30 years last month.

Russia-backed rebels accused Ukrainian forces of shelling their territory in violation of agreements aimed at ending conflict in the contested Donbass area, the RIA news agency reported, which Ukraine denied later.

Oil majors BP and Shell fell 1.3 per cent and 1.9 per cent, respectively, tracking weakness in crude prices after France and Iran said parties were closer to an agreement to salvage Iran's 2015 nuclear deal with world powers, offsetting Ukraine tensions.

Stronger energy prices has helped the commodity-heavy FTSE 100 weather geopolitical tensions better than its pan-European counterparts, with BP and Shell gaining more than 20 per cent so far since the start of 2022.

Banking stocks slipped 1.2 per cent, with Standard Chartered falling 4.4 per cent after its full-year profit missed expectations.

"It has a number of legacy issues that it needs to deal with. Over the course of the last 12 months, it's under scrutiny from regulators on both sides of the Atlantic," said Michael Hewson, chief markets analyst at CMC Markets.

The domestically focused mid-cap index fell 0.6 per cent, with travel stocks dropping 1.4 per cent.

"Travel and leisure is always going to get hit when you have geopolitical concerns in Eastern Europe," said Hewson, noting that Wizz Air and Air France KLM-SA, down 4.5 per cent and 4.7 per cent respectively, were airlines that do a lot of business in that region.

Reckitt Benckiser Group jumped 5.1 per cent on beating analysts' estimates for fourth-quarter sales, as heightened fears about Covid-19 led to increased demand for its cleaning products. REUTERS