FTSE 100 zooms past key resistance as Barclays FICC earnings soar

FTSE 100
FTSE 100

The FTSE 100 index was the best-performing major index in Europe as traders focused on the streaming corporate earnings. The index rose by more than 0.50% while the DAX, CAC 40, and Euro Stoxx 40 declined by 0.10%, 0.12%, and 0.35% respectively.

Barclays soars as trading revenue jumps

Barclays was the second big mover in the FTSE 100 after Carnival. Its stock price rose by more than 5% after the bank released its Q1 earnings. It was followed closely by Standard Chartered, which said that it had started to see some improvement in China.

Barclays revenue came in at £6.28 billion, which was higher than the estimated £5.34 billion. The earnings per share of £0.035 was slightly higher than the expected £0.033.

The bank’s revenue received a boost from its markets revenue, which rose by 77% to a record £2.4 billion. This happened after its FICC (Fixed Income Currencies and Commodities) more than doubled because of the recent volatility.

As with other banks, Barclays said that it had set aside more than £2.1 billion as impairment charges. This was more than double the previous allocation of £448 million and higher than the £923 million that analysts were expecting. Its Barclaycard business, which offers credit cards, was the most affected as most people skipped paying their debt. In a statement, the bank’s CEO, Jes Staley said that the quarter was going on well before the coronavirus was declared a pandemic.

Standard Chartered turns optimistic

Standard Chartered was the other big bank to release its earnings. The bank, which focuses mostly on the emerging markets, said that its net income declined by 12% to $1.2 billion. This was better than the expected $828 million. Its operating income also did better than expected.

The bank said that it expected its credit losses to soar from just $78 million in the past quarter to more than $956 million. On a positive note, the bank said that it had started to see significant growth from its operations in China.

These results came a day before Lloyds Banking Group is expected to release its results.

Meanwhile, other businesses in the FTSE 100 are not doing well. Yesterday, British Airways said that it would lay-off more than 12,000 employees. Retailer Next said that its sales declined sharply in the first quarter while Dixons Carphone said that its online sales had soared during the lockdown. Further, WPP said that its sales dropped by 8% in the first quarter. The biggest laggards in the index were Ocado, IAG, Hiscox, and British American Tobacco.

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FTSE 100 technical outlook

On the daily chart, the FTSE 100 index moved above the important resistance level of £5,925. This resistance was the month-to-date high as well as the 38.2% Fibonacci retracement level. By moving past this resistance, it seems that bulls are in control and that they will attempt to test the 50% retracement level at £6,240.

This trend will be ‘confirmed’ if the index manages to move above the 50-day EMA, which is a few points below the price.

On the flipside, a move below £5,512 would invalidate this trend because it would send a signal that there are still sellers in the market. This price is important because it is a few points above the 23.6% retracement level. It is also at the lowest swing that happened on April 16.

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