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Wall Street starts higher as Crimea joins Russia

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Wall Street extended gains seen yesterday as Crimea remained the big issue ahead of a two day Fed policy meet in the US set to kick off today.

The benchmark Dow Jones Industrial Index added 35 points to go to 16,285, while the Nasdaq added 15 and the S&P 500 gained five points.

In the latest crucial development, Russian president Putin has supported Crimea's request to join Russia and a bill has been signed between him and Crimean leaders.

It follows the controversial referendum Sunday, which Europe and the US declared as illegitimate. The move therefore represents an escalation in tensions between East and West.

Meanwhile, the Fed's FOMC meeting today is widely expected to see the launch of scaling back of monthly bond buying as economic stimulus eases.

Also, economic institute ZEW data published today, showed that investor optimism in Germany and the wider Eurozone plunged this month.

In US corporate news, Wal-Mart, the Asda owner, was a topic for the scribblers. It has extended its online videogames business into the stores themselves.

This will allow shoppers to trade in used videogames for groceries from March 26 this year. It will include such games as Sony PlayStation3 and Microsoft Xbox 360.

The games will be refurbished and offered up for sale. The news had a negative effect on GameStop Corp, which was the biggest loser on S&P500 on fears for its own used game business.

In the UK, Footsie was hanging on to gains - up 24 points to 6,592 with tomorrow's Budget on investors' minds.

A firm never far from the headlines - G4S (LON:GFS) was among the top gainers as details of the security and outsourcing giant's realignment of its operations emerged.

Miners however took the brunt of selling in early deals deals, with Fresnillo (LON:FRES) down 4.27% and Randgold Resources (LON:RRS) slipping 1.73%.

Elsewhere, the day’s major faller also came from the retail sector, as online clothes merchant ASOS (LON:ASOS) slumped after warning margins will be squeezed by bigger-than-expected capital investments into warehousing capacity.

It expects to invest £68mln, rather than £55mln, in expanding its sales capacity (to £2.5bn versus £1bn currently). Consequently, margins are expected to reduce to around 6.5%. Shares tumbled almost 13%.

Elsewhere, the junior space wasn't faring so well - FTSE AIM All share was down almost nine, while FTSE AIM 100 dropped over 60 as traders took risk off the table.

Among the notable risers however was Stellar Diamonds (LON:STEL), which shot up almost 11% after it said it continued to recover high grades and ‘exceptional’ quality stones from its Tongo kimberlite dyke project in Sierra Leone.

So far the group has recovered 551.6 carats from its bulk sampling programme at an average grade of 126.3 carats per hundred tonnes, which is higher than the estimated grade 120 carats per hundred tonnes.

Not just that, a number of ‘outstanding’ gem quality diamonds have been uncovered with stones up to 6.7 carats in size.

Stellar said it anticipates the grade will increase as further diamonds are recovered from re-processing.

Also on the up was Advanced Computer Software (LON:ASW), which revealed yet another strong annual performance with both revenues and underlying profits up.

The healthcare and business software specialist expects revenues to climb by 67% to at least £202mln with underlying profit [EBITDA] to be no less than £45mln (£27mln) in the year to February. Consensus forecasts were for around £199mln of revenue and about £44mln of profit.

UMC Energy (LON: UEP) was also a big gainer - rising nearly 44%, while another riser was StratMin Global Resources (LON:STGR), up 3.2%, after it revealed an immediate uplift in the carbon content of graphite produced following the installation of a scrubber at its Loharano project in Madagascar.

The most recent trial production batch averaged a carbon content of 90%, with some samples as high as 92% - a significant increase on the percentages achieved before the scrubber was installed (around 78%) and will mean a higher price per tonne for StratMin.

AIM heavyweight Gulf Keystone Petroleum (LON:GKP) was back in focus on Tuesday and shares advanced as investors decided the shares were cheap again after last week’s heavy fall

That came when an independent reserves and resources update that disappointed its disciples.

A total of 12.5bn barrels of gross oil in place were confirmed in the report, which is someway shy of prior estimates in the order of 19bn barrels.

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