Banking and oil stocks drive FTSE 100 lower as Ukraine tensions weigh

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* Reckitt Benckiser gains on pace of sales

* Travel stocks hit by rising tensions in Ukraine

* FTSE 100 down 0.9%, FTSE 250 down 1.2%

Feb 17 (Reuters) – British stocks fell on Thursday on reports of trade fires between Ukrainian forces and pro-Moscow rebels, while weakness in financials and energy stocks further rattled sentiment.

The blue-chip FTSE 100 fell 0.9%, extending Wednesday’s losses, after data showed consumer prices rose at the fastest annual rate in nearly 30 years last month.

Russian-backed rebels and Ukrainian forces on Thursday traded accusations that each had fired across the ceasefire line in eastern Ukraine.

Oil majors BP and Shell fell 1.4% and 2.7%, respectively, following crude prices as talks to resuscitate a nuclear deal with Iran entered their final stages, but losses were limited by the Ukrainian crisis.

Rising energy prices have helped the commodity-heavy FTSE 100 weather geopolitical tensions better than its pan-European counterparts, with BP and Shell gaining more than 20% since the start of 2022.

Bank shares slid 1.3%, following weak yields on two-year UK government bonds, which fell sharply for a second day in a row.

The domestically-focused mid-cap index fell 1.2% as travel stocks fell 1.8%.

“Travel and leisure are always going to be hit when you have geopolitical concerns in Eastern Europe,” said Michael Hewson, chief market analyst at CMC Markets.

Wizz Air and Air France KLM-SA, both down 7.4% each, are airlines doing a lot of business in this region, Hewson added.

Standard Chartered reversed early losses to end up 1.7% after the lender raised key profitability targets and promised shareholders additional payouts, despite full-year profits falling short of expectations, as banking on inflation-fighting rate hikes around the world to boost lending.

Reckitt Benckiser Group jumped 5.9% and was the blue chip index’s biggest gainer after beating fourth-quarter sales estimates as heightened fears over COVID-19 led to higher demand for its cleaning products. (Reporting by Bansari Mayur Kamdar and Amal S in Bengaluru; Editing by Subhranshu Sahu, Rashmi Aich and Shounak Dasgupta)


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Felix J. Dixon