FTSE 100 trades in positive territory despite fall in the UK composite PMI

Summary 

  • FTSE100 is trading in green and set to end the week in a positive zone after starting the week below the 7000 mark.
  • UK government is set to issue new debt of at least 15 billion pounds in this financial year using the new green gilts bond, which is now accepted by the Bank of England.

London Stock Markets continue to gain on Friday morning trade with benchmark index FTSE100 climbing 0.79% at 7023 despite a fall in the UK composite PMI for July month, as per the data released by the IHS Markit/CIPS. The UK PMI reading of 57.7 is a four-month low and below the consensus forecast of 62.7. The fall in the PMI data indicates slightly slower GDP growth and economic recovery in the third quarter of this year, after rebounding sharply in the second quarter due to ease in lockdown restrictions.

Bank of England (BoE) said on Friday that it would accept new green gilts, which will be issued by the UK government as part of its monetary policy and asset purchase program. The government plans to issue at least 15 billion pounds of new debt this financial year and new green gilts specifically designed for investors who demand such bonds, whose proceeds will be used for environmental investments. Meanwhile, the Mid-cap focused FTSE250 index was up by 0.73% at 22840 levels.

European Markets

Major European markets continue to trade in green on the last trading day of the week. German blue-chip index DAX was up by 0.96% at 15663, while the CAC40 benchmark index of France was at 6551, up by 1.08%. The European market continues to move upward after yesterday’s ECB meeting provided fresh confidence. The European Central Bank said that it would continue its bond-buying and wouldn’t raise the interest rate around this time.

Currency Markets

The pound slipped 0.05% at 1.3756 against the US dollar; the dollar edged higher with investor’s focus shifting now from the ECB meeting to next week’s all-important Federal Reserve meeting. The EUR/ GBP currency pair traded at 0.8555, up by 0.11%.

Commodities

Brent crude oil contract trades at USD 73.62, down by 0.23%. Meanwhile, WTI crude oil in the August future traded at USD 71.80, down by 0.15%. The crude oil has recovered from Monday’s fall of over 7% and is set to end the week a little higher. Monday fall was due to concern over economic recovery after the recent rise of delta variant cases worldwide.

Gold August futures contract slipped below the USD 1800 mark and trades marginally down by 0.39% at USD 1799 per ounce.

Asian Markets

Major Asia Pacific indexes made a mixed closing, with a negative bias on Friday, with Australia’s ASX200 closing at 7394, up by 0.11%. Shanghai Composite of China closing in red, down by 0.68% at 3550. Nikkei 225 of Japan also closing in green, up by 0.58% at 27548. Hong Kong’s Hang Seng index was down by 1.5% at 27284. India’s Nifty 50 closed at 15856, down by 0.20%.

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