FTSE 100 by more than 60 basis points as the market reacted to the perceived market conditions. Other bourses in Europe also gained, with the CAC 40 and DAX gaining by more 0.90% and 0.70% respectively. The index ignored the rising risks between the US and China as Beijing passed the controversial security laws in Hong Kong.
M&G share price surges
The biggest gainer in the FTSE 100 index was M&G, the respected money manager. Its stock price rose by more than 6.75% as investors cheered its acquisition of Ascentric Platform from Royal London. M&G is the third-biggest public money manager in the UK with asset manager with more than £300 billion in assets under management. In the deal announced yesterday, M&G will acquire assets worth more than £14 billion.
It will bring relationships with more than 1,500 companies. By acquiring the platform, M&G will be following in the footsteps of other asset managers like Standard Life Aberdeen, which owns Elevate and Standard Life Wrap platforms. As a result of the deal, other asset manager shares also rose, with Standard Life Aberdeen rising by more than 2%.
EasyJet share price gains on new layoffs
EasyJet was a big gainer in the FTSE 100 as the stock price rose by more than 3.45%. These gains came as the embattled airline announced that it would slash about 30% of its workforce. This means that more than 4,500 jobs will be at risk. These layoffs are in continuation of other money-saving strategies the company has made recently. It has deferred delivery of about 24 planes and borrowed more than £1.1 billion to boost its liquidity. The company expects that it will fly again in June.
Rolls Royce share price lags
The biggest laggard today was Rolls Royce, whose share price dropped by more than 6%. The engine-maker is facing significant challenges as airlines continue to suffer. Apart from EasyJet, we also received news that Scandinavian airline, SAS was considering laying-off thousands of employees. Just this week, Latam Airlines went bankrupt. A few weeks ago, we reported that the company was laying-off thousands of workers.
Other laggards in the FTSE 100 were Meggit, HSBC, Standard Chartered and Diageo.
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FTSE 100 technical forecast
The FTSE 100 is trading at £6,182, which is an important level for three reasons. As with the ASX 200, the FTSE 100 is trading at the highest it has been since March. Second, the price is along the 50% Fibonacci retracement, and third, it is inches away from the 100-day exponential moving average. Therefore, if the price moves above the 50% retracement, it will mean that bulls are in control and they will now target the 61.8% retracement at £6577.
On the flip side, a slide below the psychological level of £6,000 will invalidate this trend. This price is also along the 50-day EMA.