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Summary
- UK shares inched higher on Wednesday, snapping the two-day plunge
- FTSE 100 briefly crosses 7,000 after UK GDP recorded 2.1 per cent growth in March
- Construction output, manufacturing & industrial production also supported equities
UK shares inched higher in the mid-morning trades on Wednesday, 12 May, snapping the two-day plunge led by the Wall Street tech sell-off after the UK GDP grew by 2.1 per cent in March 2021. The present week has been quite disastrous for all the leading global stock markets after the US inflationary concerns bit investors’ confidence.
A hurried sell-off panic was observed on Wall Street as market participants quickly rejigged their respective holdings, reducing the proportion of the risky assets in the portfolio. Following the erratic trading across the world on the fears of rising inflation in the US, catalysed by the rising factory gate prices in China, the stock indices from New York-to-London-to-Tokyo witnessed a major wipe-out in the last two sessions.
London equities have somehow managed to arrest the fall on Wednesday after the Office for National Statistics (ONS) said the UK GDP registered a 2.1 per cent growth in March 2021, however, the GDP recorded a contraction of 1.5 per cent in the January-March quarter.
According to the latest data available with the London Stock Exchange, the headline FTSE 100 briefly surpassed the psychological level of 7,000, making an intraday high of 7,002.54, up 0.78 per cent from the previous close of 6,947.99.
FTSE 100 (12 May)
(Source: EODHD/Others, Thomson Reuters)
The gains of mid-cap barometer FTSE 250 were moderate as compared to rise in FTSE 100, but other broader share indices inducing the FTSE 350 and FTSE All-Share hovered in a largely similar manner, in line with the benchmark index.
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A bunch of macroeconomic data was released on Wednesday by the ONS. Among the other macroeconomic releases that supported the domestic equities include the construction output, industrial and manufacturing production of the UK. As per the data revealed by the ONS, the construction output in March 2021 jumped 6 per cent as compared to the same period a year earlier.
Interestingly, the industrial production in the UK surged by 3.6 per cent in March 2021, witnessing the first annual gain in the last two years. Led by the partial easements in the lockdown curbs and forward orders, the industrial output realised the strongest growth since October 2017.
Meanwhile, the manufacturing production also supported the notion of economic recovery in the UK as it jumped 4.8 per cent on-year in March 2021, recording the biggest gains since April 2014. Notably, this has been the first positive movement for manufacturing production since March 2019.
