UK stocks climb as government borrowing eases and resource stocks rise

The FTSE 100 joined day two of a rally for global equities on Wednesday, with a surge in heavily weighted resource stocks and signs of an easing in government borrowing.

The UKX index,
rose 1.5% to 6,966.33, after gaining 0.5% in the previous session and falling 2.3% on Monday, which marked the biggest decline for the FTSE 100 since May. GBPUSD,
+ 0.34%
was largely stable against the dollar.

Another rise in global equities led to other assets, such as CL00 oil prices,
+ 3.17%

+ 2.94%,
gaining more than 1% as commodity rose for a second day in an effort to recoup Monday’s heavy losses. BP BP shares,
+ 3.70%

+ 3.80%
and Royal Dutch Shell RDS.A,
+ 3.36%

+ 3.41%
climbed more than 2% each.

UK government figures showed net borrowing in June fell by £ 5.5bn ($ 7.48bn), or 19.4%, from the previous month, with the driving force on the side of revenues, with total revenues increasing by 18%, analysts at Investec Economics noted.

“Overall, while net public sector borrowing remains extraordinarily high compared to a historical perspective, this is a marked improvement over last year’s figures, in which the PSNBx (borrowing net public sector net of banks) peaked above £ 47 billion in April 2020, ”the Investec analyst said. Ellie Henderson. An economic recovery since then has helped increase tax revenues and reduce government spending for COVID-19 pandemic programs, she said.

Among the moving actions, the actions of Next NXT,
+ 8.30%
jumped 6%, after the clothing retailer lifted its 2021 profit forecast and declared a special dividend to return excess cash to shareholders.

Luxury goods company Mulberry Group MUL,

reported lower pre-tax profit for fiscal 2021 thanks to lower costs and said its year-to-date performance has been driven by the UK and Asia.

The mining stocks were the center of attention, such as the stocks of Antofagasta ANTO,
+ 4.40%,
which announced a drop in copper production for the second quarter of the year and reaffirmed its annual targets. The company also expects moderate inflationary pressures to come.

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