FTSE 100 Index Extends Gains As Unemployment Increases
The FTSE 100 (INDEXFTSE: UKX) Index continues its recovery streak for the fourth consecutive day. The British stock market index is now trading only 1.15% below its August high of 7618.6 points. The benchmark index currently stands at 7532.8 points, up 0.48% till press time.
The UK equities market is experiencing bullish momentum due to the reported improvement in demand for commodities in China. Side by side, investors also expect a pause in the interest rate hike after a mixed labor report was announced today.
Markets Turn Bullish Amid Mixed Labor Report
On Tuesday, Britian reported a 4.3% increase in unemployment, as compared to 4.2% last month. The number of jobs also decreased by over 200,000. The wage growth percentage also grew to 8.5%, beating analysts’ expectations of 8.2%. As a result, investors expect the Bank of England to have a more dovish approach. This means the BOE may stop hiking interest rates very soon.
Additionally, the recent restructuring of the debt owed by the Chinese real estate company Country Garden, also helped create some bullish sentiment in the UK equities. The FTSE 100 index currently stands 3.8% above its yearly low.
FTSE 100 Index Forecast
The chart for INDEXFTSE: UKX shows the index heading towards the 200 MA, which currently lies at 7,634 points. The 7,634 points level is a critical level due to the confluence of the drawn downward trend line and the 200 MA.
The FTSE 100 index forecast will flip bullish if it gains strength above the 200MA. If the UK stock markets continue to experience positive sentiment, the bulls can eye the retest of the 7,690 points level as their next target. However, there is a higher likelihood of a pullback from the 7,634 level in the coming days.
I accurately predicted the rejection of the FTSE 100 from the 7,900 level in multiple forecasts. Therefore, you’re welcome to follow me on Twitter for my updated analysis of the index.