FTSE 100 INCHES UP ON MINING AND BANKING STOCKS; PMI DISAPPOINTS
FTSE 100 futures are currently trading at 7330-higher by 0.45% as compared to the previous closing. The contract closed in the positive territory in the last trading session also.
In the cash markets, the blue-chip share index inched up 0.30% to 7,413.34 at the time of writing. The FTSE 100 rose 1% to end at six-month closing high on Tuesday.
The benchmark index inched up today as strength in banks and homebuilders on the prospect of another Brexit extension was outweighed by weakness in exporter shares after the pound found its ground.
The midcap index FTSE 250 was up 0.82% at the time of writing.
British PM Theresa May said on Tuesday that she would seek another delay beyond April 12 to Brexit to work out a European Union divorce deal with opposition Labour leader Jeremy Corbyn. The move offered the prospect of keeping the UK in a much closer economic relationship with the EU after Brexit.
This has boosted stocks in housebuilders and British banks including Lloyds and Barclays. Barratt, Persimmon and Taylor Wimpey advanced more than 2% on Wednesday.
British banks, Lloyds and Barclays rose 3.11% and 2.48% respectively at the time of writing.
Miners on the index also gained with investors getting hopeful a new round of trade talks between the world’s two largest economies could bring an end to their trade dispute. Rio Tinto and Antofagasta added 1.92% and 0.46% respectively at the time of writing.
Companies with greater exposure to China including HSBC were trading in positive territory.
On the other hand, exporters felt the brunt of a stronger pound. British American Tobacco, spirits giant Diageo, GlaxoSmithKline, and Unilever were the biggest losers on the index.
Burberry’s stock fell 3.29% and was among the top losers as JP Morgan analysts slashed annual core profit estimates for the luxury goods brand on Brexit-related pound volatility.
On the economic front, the U.K. Services PMI for March released earlier today came in at 48.9. The PMI reading was below the market expectation of 51.
On the technical front, the RSI is currently at 66.82% and suggests that the market can move in the upward direction. The current price is above the MA5. The %K has crossed %D from below to the upside at around 37% and suggests that the market can move in the upward direction.
Overall Bias is positive and short-term trades can be initiated with below mentioned Stop Loss and Profit targets.
Trade Suggestion- Limit Buy at 7320. Take Profit at 7360. Stop Loss at 7300