The FTSE 100 is up slightly as investors react to relatively better UK GDP data. The index is trading at £5,907, which is in the same range it has been in the past few weeks. Other indices in the Europe are in the red, with the DAX index, CAC 40, and Stoxx 50 falling by 0.35%, 0.30%, and 0.40%, respectively.
According to the Office of National Statistics (ONS), the UK economy contracted by 19.8% in the second quarter. That historic decline was slightly better than the first and second estimate of 20.4%. Consequently, the economy weakened by 21.5% on a year-on-year basis.
The FTSE 100 is also rising because of the relatively strong house price index data from the UK. The data showed that the HPI increased by 0.9% from August to September. It rose by 5% on an annualised basis, which was better than the expected 4.5%.
These numbers, together with the optimism that the UK and the EU will reach a deal have helped push the FTSE 100 higher. The relatively weaker pound has also contributed to this increase.
Anglo American is the best-performing stock in the FTSE today as the stock has risen by 1.70%. It is followed by Royal Dutch Shell, which is expected to announce mass layoffs around the world. Other strong performers are Standard Life Aberdeen, Tylor Wimpey, and Barratt Developments. On the other hand, the biggest laggards are Compass Group, Smith, GVC Holdings, and Ocado.
Separately, Boohoo share price has jumped after the company released strong results. The company said that its sales for the first six months were £816 million, up from £565 million in 2019. That was higher than the £773 million that analysts were expecting. Most importantly, the company said that it expects its total revenue to grow by between 28% and 32% this year.
FTSE 100 technical outlook
The daily chart shows that the FTSE 100 has been declining in a narrow channel since June. This decline has been supported by the 25-day exponential moving averages. The price is also along the 38.2% Fibonacci retracement level. Therefore, I suspect that, in the near term, the index will remain inside this range with key support and resistance levels being at £5,600 and £6,000, respectively.
A move above the resistance will open for the possibility of the index rising to the 50% retracement at £6,243. On the other hand, a move below the support will open the likelihood of the price falling to £5,400.
Don’t miss a beat! Follow us on Telegram and Twitter.
FTSE 100 chart
More content
- Download our latest quarterly market outlook for our longer-term trade ideas.
- Follow Crispus on Twitter.
- Do you enjoy reading our updates? Become a member today and access all restricted content. It is free to join.