(Sharecast News) - London had pared some earlier losses but were still weaker by the close on Monday, as oil prices surged amid the ongoing Russia-Ukraine war.
The FTSE 100 ended the session down 0.4% at 6,959.48, and the FTSE 250 was 1.12% weaker at 19,169.78.

Sterling was in the red as well, last trading down 0.85% on the dollar at $1.3118, and losing 0.31% against the euro to €1.2071.

"In what has been a turbulent Monday session, European markets plunged sharply at the open on reports that the US was discussing the prospect of a total ban on Russian oil, which briefly sent Brent crude oil prices spiking up to $140 a barrel in Asia," said CMC Markets chief market analyst Michael Hewson.

"This spike higher proved to be rather short-lived, but it also highlighted how fickle market sentiment is, and is likely to remain, and while prices have since retreated from those intraday highs, they are still up on the day.

"While the US could probably get away with banning oil imports, it is clear that the case for doing so in Europe is a much harder one to make, with Germany pushing back by saying it would not do so."

Hewson noted that markets had recovered off the lows of the day after the Kremlin said it was prepared to stop its military action if Ukraine agreed to a set of territorial demands, and changed its constitution to guarantee neutrality.

"While markets digest what this might mean going forward it's not immediately clear why Ukraine would accept such terms given that these terms aren't that different from a few weeks ago.

"There's also the small matter as to whether Russia can even be trusted or believed on anything it says, given how it has behaved over the weekend with respect to the ceasefire evacuation corridors."

The foreign ministers of the Russian Federation and Ukraine had agreed to meet in Turkey, it emerged earlier, with Sergey Lavrov and Dmitro Kuleba set to meet later in the week on the sidelines of the Antalya Diplomacy Forum.

Turkish foreign minister Mevlut Cavusoglu, said on Twitter that he hoped the step would lead to "peace and stability".

The meeting would mark the highest level contact between the two sides since 24 February, when Moscow ordered the invasion of its neighbour.

Russian spokeswoman Maria Zakharova confirmed the meeting, Deutsche Welle said, citing TASS.

A third round of talks between delegations from Russia and Ukraine was already scheduled for Monday evening.

That development came after Russia claimed it would declare an immediate ceasefire if Ukraine recognised Crimea as Russian territory, and the breakaway regions of Donetsk and Luhansk, as independent states.

In an interview with Reuters, Kremlin spokesman Dmitry Peskov said: "Russia has told Ukraine that it is ready to stop the military operations if Kyiv meets its list of conditions."

That list also included a stop to all military action and enshrining neutrality in its constitution, with the latter meaning a rejection of any aim to enter any bloc.

Peskov added that Kyiv was aware of those conditions and that Moscow was not pursuing any further territorial claims, nor the handover of the Ukrainian capital, Kyiv.

"And they were told that all of this could be brought to an end in a split second."

Oil prices were still marching higher by the end of the day in London, with Brent crude last up 4.11% at $122.96 per barrel, and West Texas Intermediate ahead 2.65% at $118.74.

Prices for the thick black stuff had been climbing since Russia invaded Ukraine, but the latest spike was prompted by the US and Europe discussing a potential ban on Russian oil supplies.

US secretary of state Antony Blinken confirmed on Sunday that the US was in "very active discussions" with its European allies about banning Russian oil imports.

House speaker Nancy Pelosi said Congress was also considering legislation that would ban the import of Russian oil.

She wrote: "The house is currently exploring strong legislation that will further isolate Russia from the global economy."

In economic news, UK house prices rose at their fastest rate since 2007, according to data from mortgage lender Halifax.

House prices rose 0.5% in February in month-on-month terms, bringing the average to £278,123 pounds, up 10.8% year on year.

"Lack of supply continues to underpin rising house prices, with recent industry surveys showing a dearth of new properties being listed, now a long-term trend," said Halifax managing director Russell Galley.

However, inflation, tax hikes and rising interest rates could dampen price growth later in the year.

"These factors are likely to weigh on buyer demand as the year progresses, with market activity likely to return to more normal levels and an easing of house price growth to be expected," Galley said.

Elsewhere, German factory orders rose more than expected in January, underpinned by foreign demand, according to figures released by Destatis.

Orders were up 1.8% on the month following a revised 3% jump in December, beating expectations for a 1% increase.

On the year, factory orders rose 7.3% in January following a revised 5.9% the month before and versus expectations of a 5.4% increase.

China's exports, meanwhile, had slowed in the year to date according to official data, although growth remained ahead of expectations.

Exports rose by 16.3% year-on-year in January and February combined, compared to 20.9% in December.

Analysts had been expecting export growth of between 14.0% and 15.0%.

In contrast, imports were ahead 15.5%, which was down on December, when they rose 19.5%, and below forecasts.

Consensus had been for growth of around 17.0%.

In equity markets, banks were under the cosh, and travel-related shares slid, with BA and Iberia owner IAG descending 5.86%, Wizz Air falling 6.62%, TUI off 6.76%, and easyJet 7.53% weaker.

Oxford Instruments tanked 22.81% after Spectris pulled its £1.7bn bid for the company, citing global market uncertainties caused by the "deplorable" events in Ukraine after the Russian invasion.

Last week, Oxford Instruments said it had received a non-binding, indicative offer that included £19.50 a share in cash, plus new shares in Spectris worth £11.50 each.

On the upside, Russian steelmaker Evraz jumped 28.33%, Anglo-Russian precious metals miner Polymetal International gained 1.86%, and gold miner Petropavlovsk was ahead 32.98%, after all three tumbled in recent days.

Earlier, the London Stock Exchange said it had cancelled all Polymetal trades executed between 0841 and 0902 GMT, after a 700% spike in the share price.

Defence company BAE Systems racked up gains of 7.11%, while oil giants Shell and BP gushed 8.05% and 3.83% higher, respectively, amid the surging oil price environment.

Shipping services company Clarkson gained 7.54% after it posted "record" results for 2021 following a particularly strong performance in the broking and financial segments.

Market Movers

FTSE 100 (UKX) 6,959.48 -0.40%
FTSE 250 (MCX) 19,169.78 -1.12%
techMARK (TASX) 4,065.56 -0.72%

FTSE 100 - Risers

Evraz (EVR) 77.00p 28.33%
Shell (SHEL) 1,981.00p 8.05%
BAE Systems (BA.) 740.80p 7.11%
BP (BP.) 361.50p 3.83%
Glencore (GLEN) 474.85p 3.08%
Aveva Group (AVV) 2,425.00p 2.54%
Berkeley Group Holdings (The) (BKG) 3,739.00p 2.18%
Spirax-Sarco Engineering (SPX) 11,360.00p 2.11%
Flutter Entertainment (CDI) (FLTR) 8,154.00p 1.92%
Polymetal International (POLY) 172.55p 1.86%

FTSE 100 - Fallers

Melrose Industries (MRO) 113.20p -6.68%
Prudential (PRU) 1,019.00p -6.13%
Coca-Cola HBC AG (CDI) (CCH) 1,494.00p -6.03%
International Consolidated Airlines Group SA (CDI) (IAG) 117.06p -5.86%
NATWEST GROUP PLC ORD 100P (NWG) 193.20p -4.77%
Diageo (DGE) 3,348.50p -4.57%
B&M European Value Retail S.A. (DI) (BME) 570.80p -4.48%
Scottish Mortgage Inv Trust (SMT) 853.20p -4.14%
Lloyds Banking Group (LLOY) 41.25p -4.14%
Standard Chartered (STAN) 450.40p -4.01%

FTSE 250 - Risers

Petropavlovsk (POG) 2.40p 32.98%
Clarkson (CKN) 3,350.00p 7.54%
TP Icap Group (TCAP) 120.60p 6.82%
Weir Group (WEIR) 1,525.00p 6.72%
Wood Group (John) (WG.) 168.70p 6.57%
Network International Holdings (NETW) 179.55p 5.03%
Energean (ENOG) 1,089.00p 4.81%
Spectris (SXS) 2,557.00p 4.03%
Reach (RCH) 151.00p 3.71%
Hipgnosis Songs Fund Limited NPV (SONG) 106.40p 3.70%

FTSE 250 - Fallers

Oxford Instruments (OXIG) 1,760.00p -22.81%
Hammerson (HMSO) 31.52p -9.94%
Baltic Classifieds Group (BCG) 105.00p -8.30%
easyJet (EZJ) 439.50p -7.53%
PureTech Health (PRTC) 184.60p -7.14%
Tyman (TYMN) 306.50p -7.12%
Capita (CPI) 20.78p -6.98%
TUI AG Reg Shs (DI) (TUI) 181.35p -6.76%
Discoverie Group (DSCV) 737.00p -6.71%
Wizz Air Holdings (WIZZ) 2,496.00p -6.62%