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FTSE 100 Index Reverses Most Of Its Weekly Gains As Burberry Tanks

The FTSE 100 index turned red on Thursday as the UK stocks slipped after three consecutive green sessions. The benchmark index stood at 7,422 points in the final hour of trading after opening at around 7,486. This drop comes from a major technical zone, which I will mention later.

Earlier this week, the CPI data for October revealed that the UK inflation in slowing down after a rapid increase earlier this year. The YoY inflation came at 4.6% against the forecasted figure of 4.8%. This triggered a bounce in equities, but the gains were lost the very next day.

Today’s drop in the FTSE 100 index can be attributed to the 8.1% plunge in Burberry shares, which had its biggest losing day since March 2020. This was because the Fashion retailer expressed doubts about meeting its revenue targets.

If we analyze the FTSE chart on a daily timeframe, we can see that the index has undergone another failed breakout from the downward trendline. Due to this rejection, the most likely scenario now seems to be a retest of the 7,369 support level.

FTSE 100 chart
FTSE 100 Index Technical Analysis