Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

Markets stage strong recovery as investors question strength of sanctions

Markets staged a recovery on Friday (Lesley Martin/PA)
Markets staged a recovery on Friday (Lesley Martin/PA)

Global markets staged a major recovery on Friday as traders believed the sanctions imposed on Russia were unlikely to significantly impact Western economies.

The FTSE 100 leading share index in London closed up 3.9% on Friday, recovering almost all its losses from Thursday as Russia invaded Ukraine.

It was the biggest single-day rise in shares on the London Stock Exchange’s leading index in 16 months.

Similar rises were seen on France and Germany’s exchanges, while the Russian stock market ended the day up 20% – having fallen 33% on Thursday.

Russian invasion of Ukraine
Prime Minister Boris Johnson is among global leaders pushing for Russia to be excluded from the Swift banking system (House of Commons/PA)

As Russian troops entered Ukraine in the early hours of Thursday morning, investors had feared that the sanctions being discussed by world leaders could cause inflation to rise and disrupt global trade.

But by Friday many of those initial fears had been allayed, with some analysts pointing out that the EU was struggling to form a united front on sanctions, including removing Russia from the Swift transaction system.

As a result, the FTSE 100 closed the day up 282 points at 7489.46 – a 3.9% rise. On Thursday it had closed down 291 points at 7207.01.

It was the biggest single-day rise since November 2020 – the same day Pfizer announced it had created a successful vaccine against Covid-19.

Oil prices also fell back below 100 dollars a barrel, having breached the psychological barrier on Thursday over fears that Russia’s gas companies could be hit with sanctions.

A barrel of oil was worth 96.72 dollars – down 2.4% on the day.

Europe’s reliance on Russian gas meant no sanctions have been imposed on those businesses, with banks and wealthy individuals targeted instead.

In Europe, several leaders are pushing for Russia to be excluded from Swift – including Prime Minister Boris Johnson – however, Germany and Italy are said to be holding out on implementing such a move.

Analysts say that for a ban from the system, which all banks use for transferring money between institutions, a global approach is needed.

There was also incredulity over Italy managing to avoid sanctions being placed on some of its luxury goods businesses from selling products to Russia.

Michael Hewson, chief market analyst at CMC Markets UK, said: “European markets have seen a sizeable rebound today as fault lines over sanctions, particularly amongst some EU members, took some of the bite out of yesterday’s actions by the US and UK.

“The decision to leave out energy from the sanctions list is in some way understandable, given the global economic impact that might have, however other carve-outs like luxury goods and items for the likes of Italy and Belgium come across as harder to stomach, and make a complete mockery of the whole sanctions process.”

It was also suggested that Russia’s attempts to start talks with the Ukrainians in the Belarus capital Minsk could be a sign that any invasion may be short-lived.

Already a subscriber? Sign in

[[title]]

[[text]]

More from the Press and Journal Politics team

More from the Press and Journal