The FTSE 100 has sustained its bull run, going on to record another all-time high on Thursday, after rising by 0.64 per cent to hit 8092.93 points. The current rally is powered by strong earnings reports from large market-cap companies like Barclays, Unilever, and AstraZeneca. The other big news in the market is the move by Australian mining giant BHP Group to make a $38.8 billion offer to buy UK-based Anglo American. If the deal goes through, it could hand over control of 10% of the world’s copper market to BHP.
Barclays reported a lower-than-expected decline in profit in the first quarter of the year, reporting $2.84 billion, or a YoY decline of 12%. However, it still exceeded analysts’ forecasts, which had predicted $2.2 billion. Barclays shares were up by 3.73% at the time of writing.
Pharmaceutical giant Astrazeneca followed the same script, as it reported better-than-expected earnings on Thursday. The company reported revenues of $12.68 billion, beating the market forecast figure of $11.84 billion. Furthermore, the revenue translated to an EPS of $2.06 versus a market forecast figure of $1.92. Astrazeneca stock price was up by 4.95% at the time of this writing.
Unilever, the third-largest company in the FTSE 100 list, also reported a spike in returns with a 4.4% growth in sales. The company’s turnover rose by 1.4% to € 15.0 billion. Looking ahead, the current FTSE rally is likely to be sustained by expectations of interest rates cuts by the Bank of England. Many analysts opine that UK inflation is coming down and the pressure to spur the economy could move the BoE to lower interest rates from the current 5.25% level. Furthermore, the dollar’s strength against the pound sterling is likely to keep many FTSE profitable, as they are mostly multinationals that earn in dollars and report in sterling equivalents.
Technical analysis
The momentum on FTSE 100 signals the continuation of the upside. If the bulls maintain the index above 8034.71, they could break the next resistance at 8106.88 and potentially test 8173.90 in extension. Conversely, if the index moves below 8034.71, it will signal control by the sellers, with support at 7990.04. Furthermore, continuation of the control could build the momentum to test 7.945.36, and render the upside view invalid.
