- Summary:
- The FTSE 100 Index initially traded upwards after strong UK economic data, but tariff fears have driven traders to take risk averse postures.
The FTSE 100 Index declined on Friday on account of a sour trade tariff sentiment, dropping 0.2% and reach 8,650 points at the time of writing. National Grid led the largest market cap stocks, going up by 2.21%, Unilever gained 1.21% and the Index’s largest stock, AstraZeneca gained 1.18%. The gain snapped a two-day downtrend, supported by positive UK retail sales data.
UK Retail Sales rose unexpectedly by 1% in February, stronger than analysts’ consensus forecast figure of a -0.3% decline. In addition, Core Retail sales (excluding auto sales and fuel) grew by 1%, during the month, beating the forecast 0.5% contraction. Similarly, the annualised equivalent beat forecasts, printing out 2.2% versus the median forecast 0.5%.
Also, UK GDP figures added support to the FTSE 100 Index outlook. According to data released by the Office of National Statistics on Friday, the British economy grew by 1.5% year-over-year in the fourth quarter of 2024, up from the third quarter’s 0.9% and exceeding the consensus forecast of 1.4%.
While these figures provides downward support for the FTSE Index and the broader UK equities market, the newly-announced US auto tariffs and the incoming reciprocal tariffs is driving traders to take risk- averse positions. That is likely to become more apparent next week, with retaliatory counter-tariffs likely to follow suit.
FTSE 100 Index Prediction
The FTSE 100 Index has its pivot at 8,670 and the momentum calls for an extended downside below that mark. That will likely see the first support come at the 8,639 points mark. However, a stronger momentum will break below that level and clear the path to test the second support at 8,619.
Conversely, the momentum could shift to the upside if the index breaks above 8,670. The Index will likely meet the first resistance at 8,688. However, a stronger push by the buyers will clear that barrier, invalidating the upside narrative. In addition, the extended bullish control could potentially take the action to higher to test 8,714 points.
