Markets up on PMI survey
As UK Prime Minister Boris Johnson kick-starts the economy after easing lockdown measures last month, Britain’s manufacturing sector is showing signs of tentative recovery according to the latest IHS Markit / CIPS UK Manufacturing PMI survey which shows a rise from a record-low 32.6 in April to 40.7 in May. Nevertheless, the UK Manufacturing PMI remains below the 50 mark, which separates economic growth from contraction. Anything below 50 suggests the economy is shrinking, whereas a figure above 50 denotes growth.
“After IHS Markit published the UK Manufacturing PMI survey on Monday, the FTSE 100 closed 1.5% up at 6,166 and is continuing its rally on Wednesday, up 2.26% at 6,360, with markets across Europe and Asia recording new gains, and Wall Street is higher in trading this afternoon,” says currency experts, Halo Financial (www.halofinancial.com).
The Nikkei 225 Index is 1.29% up at 22,613, and the Dow Jones Industrial Average (DJI), which measures the stock performance for thirty of the largest companies in the United States is 1.2% higher at 26,051.
“Despite the rise in investor optimism, economists warn that the UK manufacturing sector is at risk of lasting damage and recovery may not take place as quickly as expected for several reasons. They say that the threat of a second wave of coronavirus infections and the possible discontinuation of emergency support could diminish chances of a rebound,” comments Halo Financial.