Trading the FTSE 100 Index: What to look for this week?

The FTSE 100 index is currently trading at 7,464.34, up 0.40%, or 29.52 points (26 July 2017). The 101-member index has a year-to-date return of 4.50%, and a one-year return of 15.50%.

Trading the FTSE 100 Index

It is trading near the upper end of its 52-week range, which has a high of 7,598.99, and a low of 6,615.83. The FTSE 100 index has been performing strongly in recent days, and by Wednesday, 26 July, there were 78 members up, and 19 members down. The best-performing stocks include the following:

  • ITV PLC – up 2.50% or 4.40
  • Anglo American PLC – up 2.13% or 25
  • British American Tobacco PLC – up 1.72% or 91
  • J Sainsbury PLC – up 1.59% or 3.90

The stocks that came under pressure midweek included the following:

  • Paddy Power Betfair PLC – down 2.55% or 195
  • GlaxoSmithKline PLC – down 1.39% or 22
  • Standard Chartered PLC – down 0.99% or 8.30
  • HSBC Holdings PLC – down 0.46% or 3.50

How Have UK Stocks Been Performing?

As July closed out, the FTSE 100 index moved broadly higher, with major swings in several banking stocks. Foremost among them was Metro Bank. The bank announced higher than expected profits, and has boosted sentiment among shareholders. By midmorning, shares in Metro Bank rose 3.7%, although they retreated towards the end of the day.

On the FTSE 100 index, Sage Group shares dropped 3% following an acquisition of an American software company for $850 million. The UK-based FTSE 250 index also gained ground, with energy company Tullow Oil rising 3.2%, despite significant losses during the first half of the year.

Blue-chip stocks have been among the best-performing equities in the UK all share index. Strong gains in oil companies and mining companies helped to drive profitability on the FTSE 100 index.

According to Saxon Trading expert Montgomery P. Morton, ‘We are seeing positive growth trends from commodities in the UK market. For now, oil seems to be taking its cue from OPEC’s latest export figures, indicating that US imports from Saudi Arabia are significantly lower. With reduced supply on the markets, prices will invariably rise. The current price of Brent crude oil on the ICE, for delivery in September, is $50.53 per barrel, and the price of WTI crude oil on the NYMEX for delivery in September is $48.37 per barrel. This is positive news for oil stocks on the FTSE 100 index. As oil prices rise, the market cap of oil companies is boosted on the indices.’

Spot gold price

Commodities overall have made strong gains of late. The price of copper continues to rise, and even gold is trading at $1,246.87 per ounce, for a 30-day gain of 0.43% or $5.30. The 6-month performance of the precious metal is up 5.35%, or $63.60 per ounce.

Strong gains by UK-listed commodities companies, Antofagasta PLC, Glencore PLC, and Fresno PLC helped to drag the UK all share index into the black. Meanwhile, Royal Dutch Shell, BP and others are also trading in the black, and that has added significant momentum to oil stocks.

How are UK Factories Performing?

Governments statistics reveal that the UK economy grew at an anemic rate of 0.3%, spurred in part by poor construction and manufacturing figures. UK services rose slightly to mitigate the negative impact in other sectors. That government officials regarded this as a notable slowdown is significant, and worrisome. Between January, February, and March, GDP grew at a rate of 0.2%. However, the biggest sectors of the UK economy posted quarter-on-quarter gains of 0.5%.

The UK economy has shown tremendous robustness after the June 23, 2016 referendum to break from the EU. Naysayers were anticipating a near collapse of the UK economy, but that has not happened.

Instead, rising inflation and falling real-money wagers are prompting calls from economists for a rate hike in Britain. If Governor Mark Carney accedes to more hawkish policy, it will be the first time in 10 years that the Bank of England has raised rates.

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