UK’s main stock indexes plunge as Russia invades Ukraine

The benchmark FTSE 100 index shed 2.7%, while the domestically focussed mid-cap index dropped 2.1%

UK’s main stock indexes plunged on Thursday, tracking a sharp sell-off in global equities, as investors shed riskier assets after Russia launched an all-out invasion of Ukraine by land, air and sea.

The benchmark FTSE 100 index shed 2.7% in morning trade, while the domestically focussed mid-cap index dropped 2.1%.

Russian missiles rained down on Ukrainian cities. Ukraine reported columns of troops pouring across its borders into the eastern Chernihiv, Kharkiv and Luhansk regions, and landing by sea at the cities of Odessa and Mariupol in the south.

The United States and its allies will impose ‘severe sanctions’ on Russia, U.S. President Joe Biden said.

Russia-exposed miners such as Polymetal, EVRAZ and Petropavlovsk plummeted between 16.6% and 43.5%, while London-listed depository shares of Russian bank Sberbank Rossii PAO plunged 75.3%.

Losses on the commodity-heavy FTSE 100 were smaller than its European peers.

The FTSE 100 has outperformed its pan-European peers so far this year after underperforming for five straight years, helped by a jump in heavyweight commodity stocks due to geopolitical tensions and strength in financial shares in a higher interest-rate environment.

Banks were among the worst performers in early trade, down 4.2%.

Since the Bank of England announced its interest rate hike a few months ago, we have seen a decent move higher in the UK banking sector because it was pretty undervalued, said David Madden, a market analyst with Equiti Capital.

He said: They are down today because investors are worried if anything is going to put the brakes on the Bank of England from continuing down the path to rate hikes, it would be this sort of thing that could cause economic disruption across Europe.