FTSE 100
The FTSE 100 is little changed as investors remained concerned about stimulus in the United States. The index is trading at £5,956, which is within the narrow range it has been in the past few days.
Rolls-Royce, the embattled British engine-maker is leading gains for the second straight day. The company’s shares are trading at 158p, which is more than 35% above its lowest level of 102p. Investors believe that the company’s shares are oversold after it dropped by more than 80% this year. They are also optimistic that the firm will recover as international travel resumes. Additionally, they believe that the company will perform well as it raises billions of pounds.
Retailers are also among the best-performing stocks in the FTSE 100 today. Tesco shares are up by more than 2.20% after it released strong first-half year results. The firm’s profit rose by 28% to £551 million in that period. Ocado, an e-commerce company has also performed well. Other top performers in the FTSE are Smiths Group, Tyler Wimpey, Glencore, and Diageo.
On the other hand, International Consolidated Airlines Group (IAG), the owner of British Airways is the worst-performing stock in the FTSE today. Its stock has dropped by more than 3%. Other weak performers are BT Group, RELX, Compass Group, and Whitbread.
The FTSE 100 index is also struggling because of the overall stronger British pound. The sterling has gained by more than 0.35% against the dollar and by 0.10% against the euro. A stronger pound is usually negative for the FTSE because most firms in the index sell their products abroad.
The daily chart shows that the FTSE 100 has been in a narrow range in the past few days. As such, the price has been forming a descending triangle pattern that is shown in green below. It is also along the 25-day and 15-day exponential moving averages and is also slightly above the 38.2% Fibonacci retracement level.
Therefore, for today, I expect that the index will remain within this range. However, with the triangle pattern nearing its confluence zone, there is a possibility that the index will break out lower in the near term.
