The FTSE 100 index has erased earlier gains as investors react to the rising number of Covid-19 cases. The index is trading at £5,780, which is 0.20% below yesterday’s close.
Banking stocks jump after impressive results
Bank stocks are among the best-performing companies in the FTSE 100 because of the relatively strong earnings. Earlier today, HSBC released better-than-expected results. The bank’s pre-tax profits dropped by 36% in the third quarter to $3.1 billion. That was better than the $2.1 billion that analysts were expecting. Notably, the management said that it was considering paying dividends as it complied with a directive by the Bank of England.
HSBC share price is up by 5.15% in London. Other banks have also done well, with Barclays, Standard Chartered, and NatWest rising by 1.12%, 2%, and 0.66%, respectively. This is because banks like Lloyds have also expressed interest in paying their dividends.
Energy stocks rise
In addition to banks, energy stocks in the FTSE 100 index have also jumped. BP share price has jumped by close to 3% as investors react to the impressive corporate earnings. The company came back to profitability as its underlying replacement cost profit rose to $100 million.
That compared with a $6.7 billion loss in the previous quarter. Indeed, as I wrote yesterday, historically, BP share price tends to jump after releasing its earnings. Meanwhile, Royal Dutch Shell stock has added more than 0.20%.
On the other hand, the worst-performing shares in the FTSE 100 are Smiths Group, St. James Place, M&G, and Rio Tinto.
FTSE 100 technical outlook
On the daily chart, we see that the FTSE 100 index is at an important place. At the current level of £5,780, it is at the lower side of the descending triangle pattern. It is also a few points below the important 38.2% Fibonacci retracement level and below the 15-day and 25-day exponential moving averages.
Therefore, I suspect that the index will continue falling as bears aim for the next support level of £5,600. On the flip side, a move above the descending line of the triangle will invalidate this prediction.