3 Reasons Why FTSE 100 Index Is Spiking Higher Today

The FTSE 100 is firmly in the green territory as traders focus on Brexit, US nonfarm payrolls data, and hopes of a coronavirus vaccine. The index is trading at £6,218, which is slightly above the day’s open of £6163. Other indices in Europe are also doing well. In Germany, the DAX Index is up by 1.70% while in France, the CAC 40 index is up by more than 1.30%. The overall Stoxx 50 is up by more than 1.50%.

UK stocks rise on Brexit hopes

Investors seems convinced that the EU and the United Kingdom will make progress towards a deal in the ongoing meeting. According to Bloomberg, analysts believe that while sharp differences remain, the two sides are heading in the right direction. For one, this week’s meeting is the second one that the teams are meeting physically. Also, after months of frustration, there are signs that the two sides will start making some compromises since time is running out.

A Brexit deal would be a good thing for companies in the FTSE 100. Indeed, companies that would benefit in case a deal is reached are among the best-performers in the index today. For example, Rolls Royce share price is up by more than 6.8% today because it would benefit immensely by having free access to Airbus. The same is true with IAG and Melrose Industries share price.

FTSE gains on reopening plans

The FTSE is also gaining because of the ongoing reopening process. In a report yesterday, the EU released a number of countries that will have free access to the bloc. That is a good thing for the FTSE 100, which has several travel-related companies. In fact, British Airways owner, IAG shares have jumped by more than 1%. Similarly, International Consolidated Airlines shares have risen by 5.95% while those of InterContinental Hotels have risen by more than 3.54%.

Also, investors are excited about the multi-billion dollar infrastructure spending plan proposed by Boris Johnson.

Vaccine gives hope

The FTSE 100 is also rising because of hopes of a coronavirus vaccine. In a statement yesterday, Pfizer announced that its initial trials of its vaccine is showing positive signs of efficiency. This is a positive sign because Pfizer is well-known in the pharmaceutical industry. Better still, Pfizer is not the only company developing the vaccine. Gilead has started selling remdesivir, the drug that lessens hospital stay while companies like Moderna are making progress.

Top movers in FTSE 100

Most companies in the FTSE 100 are in the green today. The worst performers are Smith, National Grid, Homeserve, Ocado Group, and Auto Trader. These shares have dropped by more than 1%. On the other hand, the best performers are Associated British Foods, Rolls Royce, ITV, and Melrose Industries. Other notable gainers are Barclays, RBS, and HSBC.

FTSE 100 technical analysis

The FTSE 100 index is trading at £6,226. On the daily chart, the price is above the 50-day exponential moving averages and slightly below the 100-day EMA. Also, the price is along the 50% Fibonacci retracement level. Most importantly, it is above the ascending trendline that is shown in red below. Therefore, the index may continue to rise as bulls attempt to retest the previous support at £6,357.

On the flip side, a move below £6095 will invalidate this thesis. This price is along the lowest level on yesterday and is also along the rising trendline.

FTSE 100 technical analysis

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