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Summary
- UK shares were mostly lower as high April borrowing dismantled confidence
- In April, the net borrowings escalated to second-highest peak since 1993
- FTSE 250 somehow managed to float in the positive territory
UK shares remained flat, trading marginally lower for most part of the day as second-highest public sector borrowing on record in the month of April dismantled the already-diminished investors’ confidence. The benchmark FTSE 100 surged moderately in the opening deals, making an intraday high of 7,067.60, up 0.22 per cent from the previous close of 7,051.59.
The index failed to surpass the marginal surge after macroeconomics data indicated a tightened condition with borrowing in April 2021 registering a second-highest peak in the United Kingdom since the government started maintaining monthly records from 1993.
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According to the data released by the Office for National Statistics (ONS), the net public sector borrowing in the UK was estimated at £31.7 billion in April 2021.
Earlier last year in April, the total borrowing recorded an all-time high of £47.3 billion, the month when initial shockwaves of the coronavirus pandemic gripped the economic growth with industry-wide layoffs and reduced earnings.
For the financial year ending March 2021, the total public sector borrowing has been estimated at £300.3 billion, the highest reading since 1946. The sentiments of market participants have been already battered by the not so favourable global cues, the towering deficit has significantly made it worse.
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As per the data available with the London Stock Exchange, the FTSE 100 was trading at 7,047.28, down 0.06 per cent. During the day so far, the index made an intraday low of 7,040.27.
FTSE 100 chart (25 May)
Image Source: EODHD/Others
The other broader indicators including FTSE 350 and FTSE All-Share hovered slightly lower in the afternoon session.
On the contrary, the mid-cap benchmark FTSE 250 somehow managed to float in the positive territory with gains capped up to 0.50 per cent. The index was trading at 22,508.07, up 0.11 per cent from the previous close of 22,483.73.
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Of late, the market indices have been largely skewed by the macroeconomic releases as the optimism surrounding the ever-expanding scale of the immunisation programme has been apparently factored in by the investors. In the present week ahead, the upcoming developments in the energy market, as well as the Covid activity in some of the nations can affect the markets.
The Society of Motor Manufacturers and Traders Limited (SMMT) is slated to release the car production growth for the month of April 2021 on Thursday, 27 May.
