Victoria Scholar, interactive investor's head of investment, runs through today's big stories and how financial markets are reacting.
The FTSE 100 is outperforming, trading just above the flatline against a backdrop of red across the major European bourses. Mining stocks like Anglo American (LSE:AAL), Glencore (LSE:GLEN) and Rio Tinto (LSE:RIO) are trading at the top of the UK index while the banks like Lloyds Banking Group (LSE:LLOY) and Barclays (LSE:BARC) are underperforming.
The rally for the Nikkei in Japan is taking a pause for breath amid profit taking and dragged down by Nintendo and Nippon Yusen. The index has pulled back from a 10-week high ahead of the new fiscal year, having surged more than 14% from a 16-month low during the second week of March.
Oil is attempting to stage a rebound amid the prospect of fresh Western sanctions against Russia, potentially further tightening an already fragile outlook for supply.
With price action swinging between gains and losses this week, the market is attempting to weigh up the seriousness of peace talks between Russia and Ukraine alongside China’s policy response to its latest Covid-19 outbreak against the possibility of fresh Russian sanctions, Kazakhstan’s pipeline outage, falling US crude stockpiles and OPEC+’s expected plans to only modestly up supply at its meeting this week.
Shares in Nintendo slumped more than 5% in Tokyo after delaying its release of “Legend of Zelda: Breath of the Wild” sequel to spring 2023 from this year.
Given the success of the original “Breath of the Wild” which sold over 25 million units, this push back is a disappointment both for its fans and Nintendo investors, particularly given that the company has a whole series of products in the pipeline to release in fiscal 2022. It raises the question of whether there might be further delays to other franchises ahead. Nonetheless the stock has had a good run lately rallying more than 30% since October’s trough even after today’s setback. Today’s price action could represent a speedbump before the recent uptrend continues, particularly given the recent broader rally in the Nikkei.
UBS Group AG (SIX:UBSG) said it spend 3.81 billion Swiss francs buying back 6.49% of its share capital as part of its 2021 buyback programme. The Swiss lender also said it plans to repurchase up to $6 billion of its shares under its latest share buyback scheme.
Today’s share buyback announcement from UBS acts as a signal of confidence from the Swiss lender towards its financial position and serves as a stark contrast to the woes facing its embattled cross town rival Credit Suisse Group AG (SIX:CSGN). UBS’ share price has been enjoying a V-shaped recovery since the March low and is potentially on track to reclaim the February highs in the weeks or months ahead.
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