The FTSE 100 is set to decline by about 0.25% today, pulling back from the 1.7% gains made yesterday. The Footsie, which tracks the biggest 100 companies in the UK, is trading at £6,515 in the futures market.
What’s happening: The FTSE 100 index is declining partly due to the decision by Boris Johnson to announce a nationwide lockdown as the number of coronavirus cases remained stubbornly high. The country reported more than 50,000 new cases yesterday, the highest figure since April last year. A lockdown is negative for FTSE companies because of the disruptions it brings.
What next: There will be minimal business activities today. Investors will still be focused on the decision by America’s MGM to acquire Entain, the British company that owns Coral and Ladbrokes.
MGM is attempting to expand its business into online betting as its casinos get hammered by the pandemic. Entain has so far rejected the offer, saying that it undervalues the company.
Meanwhile, retailers will be watched today since Kantar will publish its holiday sales estimates. In its recent report, the company said that the UK’s retailers had their best month ever in November due to holiday shopping. Analysts expect the same trend to be seen today.
Morrison Supermarket will release its trading update. Other retailers to watch out today will be Tesco, Ocado, Sainsbury, and Next PLC.
FTSE 100 Technical Outlook
On the four-hour chart, we see that the FTSE 100 has formed an ascending triangle pattern whose resistance is at £6,677. The lower side of this triangle connects the lowest levels on December 21st and December 31st.
The index is also slightly higher than the 25-day and 50-day exponential moving averages. Therefore, in the near term, the index will remain inside this ascending channel since it is not yet close to the level of confluence.
Footsie technical chart