By Barbara Kollmeyer
The FTSE 100 index pushed back above the 7,000 level on Tuesday, with bank stocks leading the charge higher as markets try to avoid a fourth-straight losing session against the backdrop of the Russia-Ukraine war, now in its 13th day.
The FTSE /zigman2/quotes/210598409/delayed UK:UKX -0.15% rose 0.7% to 7,011, following a 0.4% drop on Monday and two sessions below the key 7,000 level. The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.0990% rose 0.1% to $1.3120.
Mining stocks were in focus, as the price of nickel surged past $100,000 briefly , before the London Metal Exchange halted trading for the rest of the day.
“Traders holding short positions, some of which are against physical holdings, have been forced to cover positions as supplies from Russia, which produces 17% of the world’s top-grade nickel, have dried up. Together with gas, wheat, and crude oil these are the contracts that have endured most of the pain related to the war and sanctions,” said Ole Hansen, head of commodity strategy at Saxo Bank, in a note to clients.
Citing sources, Bloomberg reported that a Chinese tycoon had built a huge short position and was facing billions of dollars in mark-to-market losses, as prices have surged. Analysts said the day’s nickel trades would likely be canceled.
“We regard the price surge as exaggerated and expect trading to calm down again once the short squeeze has run its course. The nickel price should then fall significantly again,” said Daniel Briesemann, analysts at Commerzbank in a note to clients.
Companies that produce nickel include Anglo American /zigman2/quotes/201381512/delayed UK:AAL -1.73% and Glencore /zigman2/quotes/201400686/delayed UK:GLEN 0.00% , and both shares were down more than 1% each. The mining sector overall was down, with losses as well for Rio Tinto /zigman2/quotes/202627887/composite RIO -0.52% /zigman2/quotes/208934945/delayed UK:RIO -1.01% , down nearly 3% and beleaguered Russian miner Polymetal International /zigman2/quotes/204469675/delayed UK:POLY -2.46% dropping 7%.
Stock in fellow Russian miner Evraz /zigman2/quotes/202291633/delayed UK:EVR -12.59% jumped 15%.
Shares of Shell /zigman2/quotes/206428183/delayed UK:SHEL +0.37% /zigman2/quotes/205095589/composite SHEL -1.03% rose 0.3% after the energy giant said it would no longer purchase Russian oil and apologized for a purchase it made last Friday.
On the gainers side, heavily-weighted HSBC /zigman2/quotes/208272822/composite HSBC +1.18% was getting a lift, up nearly 2% in step with gains across the European banking sector. Lloyds Banking Group /zigman2/quotes/200709414/composite LYG -0.48% /zigman2/quotes/202285510/delayed UK:LLOY -0.98% and Barclays /zigman2/quotes/206581728/composite BCS -1.66% /zigman2/quotes/208409333/delayed UK:BARC -2.04% rose more than 3% and 2% each, respectively.