By Barbara Kollmeyer
Shares of two Russian commodity companies that trade in London came under severe selling pressure on Monday, as the world watched a Ukraine standoff between Western nations and Russia.
Polymetal International /zigman2/quotes/204469675/delayed UK:POLY +3.10% stock fell 7.5%, after bouncing nearly 5% on Friday. The precious metals miner is down 14% so far this year, after a 22% drop in 2021, following 40%-plus gains in both 2019 and 2020.
Meanwhile, shares of steelmaker Evraz /zigman2/quotes/202291633/delayed UK:EVR -12.59% , down more than 16% this year so far, dropped more than 6%. The company’s shares climbed 27% last year and 16% the year before.
Losses for the U.K.-listed stocks followed a more than 8% drop for Russian stocks /zigman2/quotes/210597950/delayed RU:RTS -5.83% on Monday, as the ruble /zigman2/quotes/210561862/realtime/sampled USDRUB -0.5736% dropped to its lowest level in over a year. The U.S. has threatened heavy sanctions on Russia if it goes ahead with an invasion.
Developments over the weekend included the ordering out of all family members of U.S. Embassy personnel in Ukraine, as well as a report that President Joe Biden may order thousands of troop, along with aircraft and warships to Eastern Europe.
“The shifting market landscape is further complicated by the increasingly noisy saber rattling by Russia on the Ukrainian border. Escalation to a full armed conflict is likely to prompt market volatility and potentially a further surge in energy prices – only adding to the current inflationary pressures,” said AJ Bell investment director Russ Mould.
Against the backdrop of global selling for equities, the FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +0.72% was down 1.4%, led by mining stocks and energy giants. It was, though, holding up better than other European indexes, with gains for notable heavyweights Unilever and Vodafone.
Shares of Unilever /zigman2/quotes/204685760/composite UL +0.64% /zigman2/quotes/205449809/delayed UK:ULVR -1.78% rose nearly 6%, topping a tiny list of gainers, after media reports that Trian Partners, the activist fund of U.S. investor Nelson Peltz, had built up a stake in consumer goods group .
“It’s also been helped by expectations that well-known household brands with pulling power may be more resilient even as consumers tighten their belts,” said Susannah Streeter, senior investment and markets analyst, at Hargreaves Lansdown, in a note to clients. In that vein, shares of multinational tobacco Imperial Brands /zigman2/quotes/208789104/delayed UK:IMB +7.88% rose 1%.
Another gainer was Vodafone /zigman2/quotes/202484985/delayed UK:VOD +0.20% , after Bloomberg reported over the weekend that the telecoms group had recently explored buying Three UK from Hong Kong-listed CK Hutchison Holdings Ltd. /zigman2/quotes/208405501/delayed HK:1 +1.46% , citing sources. Such a tie-up has been speculated over for years, but regulatory issues have stood in the way. Neither company would comment to Bloomberg.
Streeter noted there were also reports of continuing talks with rival Iliad to merge the business in Italy. “The deals would potentially create a telecoms powerhouse and give Vodafone much more clout across mobile and broadband operations. It would also layer up Vodafone with armor to fend off private equity bidders thought to be circling,” she said.