The FTSE 100 joined in on the second-day of a rally for global equities on Wednesday, with heavily weighted resource stocks surging and signs of an ease in government borrowing.
rose 1.5% to 6,966.33, after a 0.5% gain the prior session and a 2.3% slump on Monday, which marked the biggest drop for the FTSE 100 since May. The pound
was largely flat against the dollar.
Another move up for global stocks took other assets along, such as oil prices
gaining over 1% as the commodity rose for a second day in a bid to recoup Monday’s sharp losses. Shares of BP
and Royal Dutch Shell
climbed more than 2% each.
U.K. government figures showed that net borrowing in June dropped by £5.5 billion ($7.48 billion), or 19.4%, versus the previous month, with the driver on the revenue side as total receipts rose 18%, pointed out analysts at Investec Economics.
“Overall, although public sector net borrowing remains extraordinarily high from a historical prospective, it is a marked improvement from last year’s figures, in which PSNBx (public sector net borrowing excluding banks) peaked above £47 billion in April 2020,” said Investec analyst Ellie Henderson. An economic recovery since then has helped boost tax revenues and reduced government spending on COVID-19 pandemic programs, she said.
Among stocks on the move, shares of Next
surged 6%, after the clothing retailer lifted fiscal 2021 profit guidance and declared a special dividend to return surplus cash to shareholders.
Luxury-goods company Mulberry Group
reported a swing to pretax profit for fiscal 2021 on lower costs and said that its year-to-date performance has been boosted by both the U.K. and Asia.
Mining stocks were in focus, such as shares of Antofagasta
which reported lower copper production for the second quarter of the year, and reaffirmed full-year targets. The company also sees moderate inflationary pressures ahead.