Recently, there has been talk of a possible ceasefire that could see Russia backing away from the war with Ukraine. Anyone who has been keeping up with the markets will know that the conflict has caused major volatility for a number of stocks. However, a ceasefire could see many of these stocks regain their value and shoot up in price. In particular, a ceasefire could be great news for anyone who invests in the FTSE 100. Here’s why!
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Why would a ceasefire be good news for FTSE 100 investors?
The conflict between Russia and Ukraine has caused a number of stocks in the FTSE 100 to fall. In fact, on the first day of the crisis, the FTSE 100 fell by 3%. This was the result of Russian influence that was significant within a number of companies listed on the FTSE 100. Furthermore, big hits were taken by the travel and tourism industries as travel to Europe dipped.
However, a ceasefire could see these stocks regain their losses. If so, the FTSE 100 could rise. This is because a ceasefire would see an end to the conflict, as well as the economic sanctions that have been placed on Russia. As a result, stocks with Russian influence and those that are linked to the travel industry could surge.
What stocks in the FTSE 100 could be affected by the ceasefire?
The FTSE 100 stocks that have been hit hardest by the conflict are those that have links to Russia and the travel industry. FTSE 100 stocks represent the 100 companies listed on the London stock exchange that have the highest market capitalisation. When Russia attacked Ukraine, economic sanctions were placed on the country in an attempt to reduce Russian influence over the British economy. This meant that many of the FTSE 100 stocks with links to Russia dropped. Let’s take a look at the impact.
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Polymetal International
Polymetal International has a number of precious metal mines throughout Russia and Kazakhstan. Moreover, the Russian Oligarch who set up the company is said to have ties to Putin. The Oligarch is the largest shareholder in the company with a 24% stake. As a result, Polymetal shares have been vulnerable to the ongoing conflict but could be saved by a ceasefire.
Evraz
Evraz is a UK steel manufacturing company that is part-owned by Russian Oligarchs. The company’s operations are mainly in Russia as well as the USA, Canada and the Czech Republic.
Evraz is a major player on the London stock exchange, but it was hit by sanctions against Russian Oligarch Roman Abramovich. While the company has major operations in Russia, its headquarters are in London.
British American Tobacco plc
British American Tobacco previously announced that it would cut ties with Russia. As a result, the company’s share price dropped by 1.4%. However, a ceasefire could see the company reinstate its ties with the country, which would lead to a price increase.
International Airlines Group
The travel giant saw major losses as Russia went to war with Ukraine. This was due to fears around travelling to Europe and the rising cost of fuel. However, the company has said that it is on track to make profits in 2022 if a ceasefire were to occur.
An end to the war in Ukraine would open up Europe to travel in the summer and could ease the rising cost of fuel. If this were to happen, IAG could recover its losses and have a great year.
