(Sharecast News) - London stocks closed well above the waterline on Wednesday, as investors picked up some bargains following recent heavy falls.
The FTSE 100 ended the session up 3.25% at 7,190.72, and the FTSE 250 was 4.43% firmer at 20,069.20.

Sterling was mixed, however, to last trade 0.5% stronger on the dollar at $1.3167, while it weakened 1.07% against the euro to €1.1891.

"Despite the ongoing Russian invasion of Ukraine, the mood in the markets has swung around and stocks are enjoying a major rally," said Equiti Capital market analyst David Madden.

"The invasion started almost two weeks ago, and stock markets have been hammered. Yesterday, the US announced plans to ban the purchase of Russian energy, and the UK is aiming to phase out oil imports from Russia too.

"The fact that Western governments seem to be carrying out an economic war against Russia, rather than military conflict, has helped the overall sentiment."

Madden said that if violence did not escalate further, it was possible that markets would continue to stabilise.

"The FTSE 250 is considered to be a good barometer of the UK economy, and it is benefitting from the overall lift in stocks.

"A sharp mover lower in oil and metal prices is weighing on commodity stocks like Shell, BP, Rio Tinto and Glencore."

Sentiment improved earlier after Ukrainian president Volodymyr Zelensky said he was no longer pressing for NATO membership, which was one of the reasons given by Russia for its invasion.

In an interview with ABC News, Zelensky said: "I have cooled down regarding this question a long time ago after we understood that ... NATO is not prepared to accept Ukraine."

Referring to NATO membership, Zelensky said he did not want to be president of a "country which is begging for something on its knees".

Fitch Ratings downgraded Russia earlier as it warned the country was close to defaulting on its debts.

The ratings agency first cut Russia's long-term foreign currency issuer default rating to 'B'/rating watch negative at the start of the month.

But on Wednesday it cut that further, to 'C', reflecting its view that a sovereign default was now 'imminent'.

The only Fitch rating weaker than 'C' is 'RD', which is given when an issuer is in default.

"The further ratcheting up of sanctions, and proposals that could limit trade in energy, increase the probability of a policy response by Russia that includes at least selective non-payment of its sovereign debt obligations," Fitch said.

It added that the risk of technical barriers to servicing debt being imposed had also risen "somewhat" since its last review on 2 March.

Strategists at Credit Suisse, meanwhile, said the multiple negative feedback loops created by the war in Ukraine had been underestimated, especially the hit to economic growth in Russia and Europe, telling clients to "get more defensive".

In a research note, veteran strategist Andrew Garthwaite said the hit to Russian gross domestic product could exceed 20%, and that when combined, the negative feedback loops from commodities, supply chains, financial contagion and the hit to confidence could push European growth down to 1.0%.

Previously, Credit Suisse had pencilled in European growth of 2.0% to 2.5%, while the consensus had been at 3.6%.

In economic news, confidence in UK household finances plummeted to a near-decade low according to new research, as the growing cost of living crisis weighed heavily.

The latest YouGov/Cebr Consumer Confidence Index fell 2.4 points to 106.6 in February.

Homeowners remained generally optimistic, with house price measures for the past month rising nearly four points and the score for the next 12 months edging ahead 0.8% to 138.2, the highest since February 2017.

Workers were also increasingly upbeat about job security for the year ahead.

But the cost of living crisis continued to weigh heavily, dragging the overall index lower - the measure looking at people's household financial situation over the coming 12 months slumped 19.3 points to 59.7, while the score looking at the previous 30 days fell 9.2 points to 71.5.

"February's drop in the Consumer Confidence Index was mainly driven by precipitous declines in the measures tracking households' financial situation," said Kay Neufeld, head of forecasting and thought leadership at the Centre for Economics and Business Research.

"Against a backdrop of accelerating inflation and the upcoming increase in the energy price cap, households are understandably nervous about the outlook for their personal finances.

"Meanwhile the war in Ukraine is likely to further add to spiralling energy costs, based on the turbulence in oil and gas markets in recent days following the imposition of Western sanctions on Russia."

Across the pond, the number of job openings in the US slipped at the start of 2022 as did the number of people voluntarily quitting their jobs.

According to the US Department of Labor, in seasonally adjusted terms, the number of job openings slipped from 11.49m in December to 11.26m for January.

That pushed the rate of job openings, which is measured as a proportion of total employment, down by one tenth of a percentage point, from 7.1% to 7.0%.

In equity markets, Anglo-Russian precious metals miner Polymetal International rocketed 69.2% after it said there had been no disruption to its operations in Russia and Kazakhstan, despite sanctions imposed on Russia after its invasion of Ukraine.

Russian steelmaker Evraz shot 18.7% higher after saying it had not been affected by international sanctions imposed on Russia.

Electrocomponents rallied 11.75% after it said that revenue and adjusted operating profit margin were tracking ahead of expectations following a strong performance over the last nine weeks.

Asia-focused insurer Prudential gained 8.61% after it reported a rise in annual operating profit driven by new business amid the Covid pandemic.

Legal & General was up 6.04% after it posted a jump in 2021 profit and lifted its dividend as it benefited from a post-pandemic economic recovery and an easing of restrictions.

Recently-battered travel-related shares were also in the black, with InterContinental Hotels up 6.73%, British Airways owner IAG ahead 11.03%, budget airlines Wizz Air and easyJet ascending 15.57% and 12.57%, travel firm TUI advancing 12.94%, and cruise operator Carnival 10.86% higher.

On the downside, miners slumped, with Rio Tinto down 1.19%, Glencore losing 1.28%, Antofagasta 1.32% weaker, and Anglo American 2.06% lower.

Centamin, Hochschild and Fresnillo were also lower, by 9.58%, 6.83% and 7.27%, respectively, as gold prices retreated.

Market Movers

FTSE 100 (UKX) 7,190.72 3.25%
FTSE 250 (MCX) 20,069.20 4.43%
techMARK (TASX) 4,172.05 3.09%

FTSE 100 - Risers

Polymetal International (POLY) 155.70p 69.20%
Evraz (EVR) 92.54p 18.70%
Melrose Industries (MRO) 124.05p 13.44%
Electrocomponents (ECM) 970.00p 11.75%
St James's Place (STJ) 1,303.50p 11.61%
International Consolidated Airlines Group SA (CDI) (IAG) 134.66p 11.03%
JD Sports Fashion (JD.) 144.65p 9.79%
Flutter Entertainment (CDI) (FLTR) 8,712.00p 9.68%
Coca-Cola HBC AG (CDI) (CCH) 1,600.00p 9.55%
CRH (CDI) (CRH) 3,211.00p 9.37%

FTSE 100 - Fallers

Fresnillo (FRES) 749.60p -7.27%
BAE Systems (BA.) 722.60p -4.22%
BP (BP.) 371.55p -2.22%
Anglo American (AAL) 3,753.50p -2.06%
Shell (SHEL) 2,004.50p -1.72%
Antofagasta (ANTO) 1,498.00p -1.32%
Glencore (GLEN) 470.10p -1.28%
Rio Tinto (RIO) 5,817.00p -1.19%
Admiral Group (ADM) 2,439.00p -1.01%
Royal Mail (RMG) 344.70p -0.20%

FTSE 250 - Risers

National Express Group (NEX) 241.80p 25.55%
Wizz Air Holdings (WIZZ) 2,909.00p 15.57%
Trainline (TRN) 182.90p 15.03%
Aston Martin Lagonda Global Holdings (AML) 863.60p 13.90%
Network International Holdings (NETW) 195.40p 13.74%
Trustpilot Group (TRST) 146.00p 13.53%
TUI AG Reg Shs (DI) (TUI) 226.00p 12.94%
easyJet (EZJ) 503.20p 12.57%
Quilter (QLT) 131.95p 12.50%
Ferrexpo (FXPO) 141.00p 12.44%

FTSE 250 - Fallers

Centamin (DI) (CEY) 99.24p -9.58%
Endeavour Mining (EDV) 1,945.00p -6.94%
Hochschild Mining (HOC) 136.50p -6.83%
Babcock International Group (BAB) 316.60p -4.03%
Energean (ENOG) 1,051.00p -3.58%
Chemring Group (CHG) 306.50p -3.28%
BlackRock World Mining Trust (BRWM) 748.00p -2.60%
Harbour Energy (HBR) 391.60p -2.15%
888 Holdings (888) 189.20p -1.97%
QinetiQ Group (QQ.) 298.20p -1.78%