FTSE 100 Ignores Strong UK Retail Sales Data – Still in Holding Pattern

London FTSE 100

The FTSE 100 index is down slightly today even as investors react to strong economic data from the UK. The index is trading at £5,987, which is below yesterday’s high of £6,088. Other indices in Europe are in the red today, with the DAX index, CAC 40, and Stoxx 50 are down by 0.05%, 0.25%, and 0.14%, respectively.

The FTSE 100 is reacting to the strong retail sales numbers from the UK. According to the Office of National Statistics (ONS), the volume of retail sales in July was higher than that in February, before the coronavirus pandemic started. The sales rose by 3.6% in July after rising by 13.9% in the previous month.

The core retail sales numbers rose by 2.0% in July after rising by 13.4% in the previous month. These numbers send a picture that the UK economy is in a recovery path, which is a good thing for constituents of the FTSE 100 index.

The FTSE 100 is also falling even as hopes that a coronavirus vaccine will come soon. In a statement yesterday, Pfizer and BioNTech said that they would seek regulatory approval for their vaccine in the coming few months. They also surprised many people when they released results of the 332 people who were part of the testing. The vaccine had fewer adverse side effects of the virus. This means that the two companies will possibly be the first ones to get approval to sell the virus.

Most companies in the FTSE 100 are in the red today. The worst performers are Hikma Pharmaceuticals, Ocado, Unilever, and British Land. These firms have dropped by more than 0.40%. On the other hand, the best performers are GVC Holdings, Rentokil Initial, IAG, and Intercontinental Hotels.

FTSE 100 technical outlook

The daily chart below shows that the FTSE 100 index has dropped in five of the past consecutive days. At the current price of £5,987, the index is at the lowest it has been since August 2. Also, it is slightly above the 38.2% Fibonacci retracement level. (This retracement connects the highest and lowest levels this year).

The chart also shows that the FTSE 100 index has been moving in a sideways direction in the past few weeks. In this, it has struggled to move above the resistance level of £6348. It has also found strong support at £5,863. It is also a few points below the 50-day and 100-day exponential moving averages.

Therefore, the outlook for the FTSE 100 is neutral, with the levels to watch being the support and resistance levels described above.

Don’t miss a beat! Follow us on Telegram and Twitter.

FTSE 100 forecast

FTSE 100

More content