- Summary:
- The FTSE100 Index is on course to register its second gain of 2025 but is pressured by concerns over the Banking sector and the UK's economy.
The FTSE 100 Index inched up in mid-morning trading on Tuesday, staying on course to register its second daily gain of 2025. The Index was up by 0.2% at the time of writing to hit 8,241 points, with notable gains by JD Sports (+6.2%), Next (+3.7%) Shell (+1.11), Diageo (+1.08%) and 3I Group (+1.33%).
However, banking stocks were down once more, raising concerns that 2025 could turn out to be a trying year amid compensation claims arising from motor vehicle finance scandal.
LSE investors generally shrugged off concerns over the UK’s economy after the latest macroeconomic data missed forecasts. The S&P Global Services PMI data for December released on Monday read 51.1, below analysts’ forecast of 51.4.
Similarly, Construction PMI contracted to 53.3 from November’s 55.2, missing the consensus forecast figure of 54.3. Also, the Halifax House Price Index declined by -0.2% in December, missing the forecast growth of 0.8%.
Natwest Group was among the largest losers of the day, declining by -2.5% on the daily chart. HSBC (-1.44%), Barclays (-1.0%), Standard Chartered (-1.36%) Lloyds Bank (-0.7%) and Aviva (0.86%) were the other stocks blinking red in the financial sector.
The decline is attributed to concerns over the impact of potential multi-billion pound compensation claims from the motor vehicle finance scandal. Also, underperformance by the construction industry and real estate sector have added downward pressure.
FTSE 100 Index Prediction
The FTSE 100 Index pivots at 8,223 and action above that level signals control by the buyers. The upside momentum is likely to encounter the first resistance at 8,250. However, extended control by the buyers could clear that barrier and potentially test 8,270.
Conversely, moving below 8,223 will signal a shift by the momentum to the downside. That could see the first support coming at 8,223, below which the upside narrative will be invalid. Also a stronger downward momentum could send the FTSE 100 Index lower and test 8,185.
