Stocks Under Spotlight

The UK’s economy was on the path of recovery after Brexit and the general elections until it was struck by the pandemic. As per the Prime Minister, UK seems to have passed its peak and is gearing up for lockdown easing. The FTSE 250 index is a set of 250 stocks ranked in the order of their market capitalisation. The set of stocks reflects UK’s domestic economy and is looked upon as a yardstick by institutional investors and market experts. In addition, investing in the FTSE 250 businesses helps in diversification of the portfolio

With domestic businesses being allowed to operate with sector specific guidelines access to easy credit and free trade negotiations with the United States under development, investing in the FTSE 250 businesses might lead to a new realm of opportunities. The UK-US trade pact would lead to increased investments, increased exports of goods & services along with digital trade and exchange of professional services will lead to increased employment. Furthermore, the UK is likely to benefit in terms of regulation of financial services with trade pact from the United States.

FTSE 250 listed businesses have always made a huge contribution to the UK’s economy. In the present scenario, when the countries are formulating a prudent approach towards international trade. US-China row has escalated in recent times and has sent jitters to the international trade relations amongst various countries, this calls for a major rerouting for global supply chains.

Moreover, UK manufacturers are looking to bring most of the operations back home. This is conceptualised to reduce dependencies on global supply chains, which got exposed due to the catastrophe caused by the coronavirus pandemic. According to a leading information provider, IHS Markit, UK’s PMI (Purchasing Managers Index), which indicates manufacturing trends jumped to 53.6 in July of 2020 pointing to the strongest increase in factory activity following the easing of lockdown measures to contain the spread of the coronavirus disease.

All these factors would force the indigenous businesses to innovate and contribute their bit to the domestic economy. In the post-pandemic era, nations would look forward to promoting home domiciled industries. The coronavirus pandemic has taught the world enough lessons after devastating the global economy both in terms of human and economic costs.

Investing in the FTSE 250 index companies could provide ideal exposure to the investors who believe in the strength of the UK’s economy. FTSE 250 index has recovered by more than 30 per cent after slipping to 12,500 level during the peak of the unprecedented crisis. According to some market experts, the market has been steadily moving towards a ‘V’ shaped recovery, while the others believe that the UK’s economy is presently in unchartered territory and they are hinting towards a ‘U’ shaped recovery. The markets have seen a considerable amount of correction in stock prices, which could tempt the investors to include them in their watchlist.