Markets stumble following Ukraine worries

Markets are floundering this morning, hit by a drop in risk appetite prompted by uncertainty over the Ukraine situation.

The FTSE 100 has started the final day of the week in the red, after reaching a seven-week closing high yesterday. Lingering worries about the crisis in the Ukraine have dampened risk appetite this morning, especially with Russian troops massing on the Ukrainian border.

In company news, Pearson has managed to rise 2% after what it says was a solid start to the year. However, the big focus is on Alstom and General Electric, with shares in the former suspended ahead of a possible statement. French policymakers have made cautious noises about the importance of the company to the national economy. Let us not forget that France once declared Danone to be of ‘strategic importance’, so I imagine that GE could face major hurdles before a successful completion.

Meanwhile, a jump in retail sales helped briefly to enliven GBP/USD, but quiet quickly returned, with the currency pair happy  to sit just above $1.68.

Do not adjust your sets – the Dow Jones actually did finish spectacularly unchanged last night, for the first time since 2001. Leaving this moderately interesting titbit aside, US markets have been afflicted by the same risk aversion as in Europe and the UK.

Microsoft and Amazon results have not set the world on fire, and while Amazon is still posting double-digit sales growth and proclaiming its determination to ‘invest for the future’, in the here and now investors can hardly be blamed for wanting to see wider margins and higher profits.

Ahead of the open, we expect the Dow to start 40 points lower at 16,460.

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