FTSE 100: UK stocks soar as commodity stocks makes a welcome return
The FTSE 100 index soared by more than 2 per cent as investors cheered the resurgence of the commodities market. The market also cheered the decline of number of coronavirus cases in Europe and ignored the Brexit skirmishes.
Commodities companies push FTSE 100 higher
The rally on the FTSE 100 was led by commodities companies. Fresnillo, the Mexican silver producer, was the best-performing stock, rising by more than 8.3 per cent. It was followed by Anglo American, the copper miner, whose shares rose by more than 5 per cent. Royal Dutch Shell and BP shares also rose in reaction to the soaring crude oil price. Other top gainers in the FTSE 100 were Glencore, Rio Tinto, and BHP Group.
The laggards in the FTSE index were retailers Ocado, Tesco, and Auto Trader and banks like Lloyds Bank and Royal Bank of Scotland (RBS). These companies declined partly because of Brexit.
Notable mentions in the FTSE index
There were a few notable companies in the FTSE 100 index that made headlines. Ryanair, the budget airline said that its profit declined by more than 27% in the first quarter. The company made a net profit of more than $701 million, down from more than $800 million last year. Another big mover was AstraZeneca, which said that it will supply as many as 30 million doses of coronavirus in the UK by September this year. The vaccine is being developed by the company in conjunction with the University of Oxford. The company received about $79 million from the UK government to develop it.
On the daily chart, the FTSE 100 index rose after forming a hammer pattern last week. The rally is an indication that bulls are still in control. The price is inches below the 50-day EMA and slightly above the 38.2% Fibonacci retracement level. A move above the 50-day EMA will likely see the index continue to rally ahead as bulls attempt to test the 50% retracement at 6219.
On the flip side, a move below last weeks low of 5634 will invalidate this price action. This price is at the intersection of the lower part of the hammer and the ascending pink line.