Baby Ace: FTSE LIVE: Traders reckon on light Western sanctions against Russia

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This Is Money Reporters

11.10: The FTSE 100 has made modest gains, rising 29.8 points to 6,557.7 despite Sunday’s controversial vote by Crimeans to leave Ukraine.

Traders are focusing instead on domestic news, like the Government’s decision to extend its Help to Buy scheme until the end of the decade.

Shares in housebuilders rose sharply today after Chancellor George Osborne’s pre-Budget announcement that another £6billion will be invested in the equity loan scheme to help an estimated 120,000 more households.

International tensions: People celebrate after most of the population of Crimea support joining Russia

Persimmon was the leading riser with a gain of 6 per cent or 85.5p to 1398.5p. Outside the top flight, Bovis Homes improved 6% or 49.5p to 904.5p, Taylor Wimpey rose 5.9p to 121.7p and Bellway gained 74.5p to 1619.5p.

Other building related stocks benefited from the move as equipment firm Ashtead rose 18.75p to 918.75p and Travis Perkins cheered 25p to 1876p.

Supermarkets remained under pressure on fears about the impact that the current round of price cuts will have on margins in the sector.

Tesco fell 5.3p to 298.4p and Morrisons, which sparked the latest sell-off after vowing to invest £1billion in lowering prices over the next three years, fell 1.2p to 207p. Sainsbury’s dropped 1.8p to 311.8p.

Meanwhile, shares in mobile phone giant Vodafone rose 1.8p to 223.95p after it announced a £6billion deal to buy Spanish cable operator Ono.

David Madden of IG said: ‘This morning homebuilding is the best performing sector as George Osborne plans to keep the Help to Buy scheme in place until 2020. The scheme harks back to the Thatcherite policy of Right to Buy and, even though there is concen this will fuel a property bubble, housebuilders are reaping the benefits for now.

‘The Crimean question still hangs over the market; the troubled peninsula voted overwhelemingly to join Russia but the referendum was not recognised by the UN so the situation is far from resolved.

‘Mineral extractors have pulled back some of last week’s losses. The global demand for minerals is under question as China’s industrial economy is slowing down. The Chinese central bank has loosened its control on the yaun, which is providing respite in the short-term.’

Jonathan Sudaria of Capital Spreads of the Crimea referendum: ‘The result probably won’t be a surprise to markets as it was widely expected, hence only the muted moves down.

‘Falls aren’t larger because how this situation develops from here is in the hands of those involved in the diplomatic back channels.

‘Although the West condemned the decision to hold a referendum; and are now condemning the result, there hasn’t been much actual action taken against Russia during the whole Ukraine episode and so there’s a slight feeling that again, nothing will actually happen to antagonise Russia other than an international ticking off.

‘Ahead of Sunday’s referendum in Crimea, talks between US Secretary John Kerry and Russian Foreign Minister Lavrov failed to find common ground keeping investors on the edge. At the same time consumer confidence in the US unexpectedly slumped to a four months low indicating the cold weather is taking its toll.’

9.30:

The FTSE 100 has opened up 10 points at 6,537.9, but investors are keeping a wary eye on the international dispute over the Crimea peninsula which could lead to damaging tit-for-tat sanctions between the West and Russia.

Crimea’s leaders declared a 96 per cent referendum vote in favour of annexation by Russia instead of remaining part of Ukraine.

But Western powers have said the vote in Crimea, which came after Russia effectively occupied the region following the ousting of Ukrainian president Viktor Yanukovich, is illegal and will mean immediate sanctions.

Some traders said they did not expect

any immediate escalation in the tensions as Western powers and Russia

settle down to negotiations concerning Crimea.

‘Both

sides will be fully aware that the other has the potential to cause a

significant amount of pain for the other, which is why neither will want

to throw the first punch,’ said Alpari market analyst Craig Erlam.

‘The

reality is that we’re likely to see a long drawn out stand-off between

the two, which traders will eventually become bored of and move on to

the next thing.’

Darren Courtney-Cook, head of trading at Central Markets Investment Management, said: ‘People are not panicking. Much of the

Crimea news had been priced in last week and the market is now just

calming itself down.’

The FTSE 100 closed down 25.9 points at 6527.9. on Friday, taking the week’s total loss to 2.8 per cent, the biggest drop since June 2013.

Stocks to watch today include:

VODAFONE: The mobile company agreed a deal to buy Spanish cable operator Ono for €7.2billion in the latest deal to rebuild its European operations.

HOUSE BUILDERS: The Government plans to extend a scheme to encourage house building and develop a new town close to London in Ebbsfleet, Chancellor George Osborne revealed ahead of the Budget this week.

ROYAL BANK OF SCOTLAND: The state-backed lender is in advanced talks with the Government to buy back a ‘golden share’, which would enable the lender to resume paying dividends, the Financial Times reported.

The paper also wrote Barclays, Citigroup and Royal Bank of Scotland have frozen bonuses across many of their foreign exchange trading teams as internal investigations scrutinise the possible manipulation of key currency benchmarks.

LLOYDS BANK: The bank said it will grow its lending to small-and-medium enterprises (SMEs) by a further £1billion this year, seeing stronger growth prospects for smaller businesses as the economic recovery takes hold.

ROYAL DUTCH SHELL: The oil major said it had suspended third party exports of Nigeria’s Forcardos grade of crude oil due to a leak in the pipeline which it is repairing.

COPPER MINERS: Copper producers plan to expand mine capacity and output to record levels again this year, underlining potential additional downward pressures on prices which have fallen steeply recently, the FT wrote on Monday.

BUNZL: The business supplies distributor said it had acquired Brazilian healthcare distributor Lamedid.

RIO TINTO: The miner has bucked the trend set by its FTSE 100 peers and decided not to put its audit contract on the market this year, despite increasing pressure from domestic and European rulemakers to do so, The Times reported.