- Summary:
- The FTSE 100 Index has returned to the upside for the first time in nearly two weeks as investors hang on hope of trade tariff breakthrough.
The FTSE 100 Index (INDEXFTSE: UKX) has returned to the upside for the first time in nine sessions, up by 1.3% at the time of writing to 7,865 points. The gain mirrored the recovery by the broader global equities markets in Asia and Europe amid rising prospect of trade negotiations between the United States and its trading partners.
Top stocks in the FTSE Index were up substantially in the first two hours of trading, as investors hang on to hope that the harsh trade tariff environment will be neutralised in the coming days. Rolls Royce led the largest gainers with its stock price up by 4.59%, airline conglomerate IAG followed at 4.50%, while Scottish Mortgage Investment stock price closed the top three at +4.17% at the time of writing. Other notable gainers included AstraZeneca (+1.7%), Shell (+1.2%), BP (+1.4%), Lloyds (+2.0%) and Barclays Bank (1.1%).
The UK Government has chosen to negotiate with the US for instead of retaliating against the latter’s 10% tariffs imposed last week. In addition, British vehicle manufactures were slapped with a 25% blanket tariff on auto exports to the US. The diplomatic approach by the UK has mitigated the risk of an escalation of the trade war, with the UK Prime Minister Keir Starmer stating that he will only sign a deal that is in the “national interest”.
Meanwhile, the European Union stated on Monday that it will propose zero-for-zero tariffs in its trade with the US even as its commission drew up a plan for potential retaliation should talks fail. The initial signs willingness of countries to negotiate augurs well for the FTSE 100 Index and the broader global economy, and will provide support to equities in the coming days.
FTSE 100 Index Prediction
The FTSE 100 Index pivots at 7,850 points and action above that level will favour the buyers to stay in control. Initial resistance will likely be at 7,897. However, an extended control by the buyers will breach that barrier and test 8,000 points mark.
Conversely, going below 7,850 will signal the onset of control by the sellers. The Index will likely find initial support at 7,745 points, below which the upside narrative will be invalid. In addition, that momentum could extend the downside to test 7,783.
