The FTSE 100 was up by 1% this morning following these announcements. However, everything could change tomorrow when the Fed concludes its meeting on monetary policy. But few commentators believe that the central bank will announce a sudden significantly change to its policy, given the existing threats to the global economy.
Yesterday, the FTSE100 dropped 0.9%, hampered by insurance and banks stocks, which are suffering from concerns about Evergrande’s potential default. However, airlines benefited from easing travel restrictions.
Today, Royal Dutch Shell is among the biggest winners, surging 3.9% after it announced plans to sell its Permian Basin assets. Stagecoach Group soared 16.7% after it announced talks of a merger with rival National Express. On the downside, Kingfisher tumbled 5.3%, despite strong quarterly results, after it revealed that its stocks of wood, cement and some products containing semiconductor chips are below target levels.
Meanwhile, new government data released today shows that British public borrowing fell by less than expected in August, due to the costs of the pandemic and inflation. Public sector net borrowing in August declined by 21% from August 20202 to 20.5 billion pounds, but this is well above the 15.6 billion pound forecast in a Reuters poll.
Earlier this month, the government announced it would raise payroll taxes to fund health spending and long-term social care costs.
Things to read:
Evergrande used retail financial investments to plug funding gaps (Financial Times)
Submarine Crisis is Way Deeper than French Pride (Bloomberg)
Alarm bells are ringing unheeded in a world yearning for optimism (Financial Times)