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UK's FTSE 100 rebounds but records second straight weekly decline

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By Reuters
UK stocks slump on tough sanctions on Russia; BP slides
UK stocks slump on tough sanctions on Russia; BP slides   -   Copyright  Thomson Reuters 2022

By Bansari Mayur Kamdar

-UK’s FTSE 100 rebounded on Friday as Western sanctions against Russia over its invasion of Ukraine were not as severe as investors had expected, but the blue-chip index recorded its second consecutive weekly decline.

Banks and insurers rose 5.4% and 5.3%, respectively, leading the benchmark FTSE 100 3.9% higher. It had slumped nearly 4% on Thursday.

While Western nations hit Russia with new sanctions including freezing bank assets and cutting off state-owned enterprises, they stopped short of disconnecting it from the SWIFT international banking system or targeting its oil and gas exports, which some analysts said helped markets recover.

“The markets are telling us that the sanctions aren’t particularly dramatic relative to what they could be,” said Russ Mould, investment director at AJ Bell.

“Some of it is people looking to buy on the dip and taking the alleged advice by financier Nathan Rothschild that you should buy on the sound of cannons and sell on the sound of trumpets.”

Precious metals rose 3.5%, led by a recovery in Russia-exposed miners Polymetal and Evraz which gained 9% and 21%, receptively.

London-listed depository shares of Russian bank Sberbank Rossii PAO and Gazprom surged 63.1% and 17.3%.

The domestically focussed mid-cap index advanced 3.2%.

After hefty falls this week, Wizz Air gained 12.1%. The company has suspended all flight operations in Ukraine. Tobacco company Imperial Brands Plc, up 3.8%, also said it had suspended operations in Ukraine.

Energy supplier Centrica gained 7.2% after its adjusted profit for 2021 doubled.

Global education group Pearson, up 12.1%, said it would launch a 350 million pound ($468.20 million) share buyback.

($1 = 0.7476 pound)