US sanctions cause sell off in Russian shares leaving FTSE level

A sharp selloff in Russian mining shares Monday caused the FTSE 100 to fall 0.32% during the day but by the close the index had regained most of the lost ground on a stronger open in the US market and a rebound across Europe. 

Russian stocks were decimated after the US announced the most punitive set of measures yet against a number of Russian businessmen, companies and government officials in response to an alleged Russian chemical attack in Syria.

US indices traded higher Monday, rebounding after a sharp selloff on Friday as the market interpreted the latest Trump administration comments about China as the softer version of the previous full frontal trade war attack. 

The Dow Jones Industrial Average traded 1.09% higher at 24,193, the S&P 500 index rose 1.1% to 2,633 and the Nasdaq increased 1.55% to 7,020.80.

Evraz falls nearly 20%

The US sanctions against Russian businesses hit the Moscow and Hong-Kong listed aluminium producer Rusal hardest, which lost 50% of its value during the day. 

Having fallen nearly 20% earlier in the day FTSE-listed Russian steel producer Evraz traded 15.56% lower at380.40p and conglomerate EN+, also listed in London and like Rusal owned by oligarch Oleg Deripaska, traded down17.48%at 481.50. Metal trading house Glencore, the largest shareholder in Rusal and the biggest buyer of Russian aluminium, fell 4.64% to trade at 334.88p. Other major miners were also affected with BHP Billiton falling 1.31% and Anglo American down 1.89%.

Rolls-Royce rallies as restructuring begins

Shares in engineering group Rolls-Royce rose 1.22% to 878.60 as the company put into motion plans to consolidate its business into fewer units and to simplify operations. The company agreed to sell L’Orange, part of its Power Systems unit, to Colorado-based aerospace supplier Woodward in a deal worth €700m. 

While L’Orange is not considered part of Rolls-Royce’s core business any more it is likely to be followed by further consolidation decisions as the company trims down operations from five major units to three: Civil Aerospace, Defence and Power Systems.

WPP shares start recovery

Shares in the world’s biggest advertising group WPP started recovering Monday to trade 1.98% higher at 1,185.75 on reports that the company has prepared a shortlist of candidates to replace current chief executive Martin Sorrell who is facing an investigation into misconduct. 

WPP said last week it has launched an internal investigation into Sorrell, who has been in charge of the company for over 30 years, a move which sent stocks falling on Friday.

Apple co-founder Steve Wozniak resigns from Facebook

In a decision which will have implications over the coming days Apple co-founder Steve Wozniak said he is resigning from Facebook as the social media site faces concerns over privacy and data violations. 

Facebook shares did not immediately suffer and traded up 1.25% on the day. However, Facebook users remain concerned about the privacy of their data as it became apparent that Cambridge Analytica, a company linked to President Trump’s election campaign, used online personality test data from users and their friends.

China speech will be closely watched Tuesday

On Tuesday the markets will closely watch the speech of Chinese president Xi Jinping for clues on China’s next move in the escalating trade tensions between the country and the US. 

For several years now China has been working towards opening up its markets to foreign traders and the speech Tuesday may contain some commitments that will help kick start negotiations between the world’s two largest economies.

Card Factory, Serica and Property Franchise Group are due to report full year results Tuesday while Hansard Global and Joules Group will pay out interim dividends.