. FTSE 100 up 1.3% as Banking Jitters Ease - Capital Street FX

FTSE 100 up 1.3% as Banking Jitters Ease – Capital Street FX

21 Mar 2023

UK markets soar as financial fears are reduced; Fed meeting is the main topic.

  • Banks climb as jitters around banking crisis ease.
  • Fed meeting eyed, BoE in the pipeline later this week.
  • FTSE 100 is up 1.3%.

London stocks rose more than 1% on Tuesday, led by gains in lenders after fears of a banking crisis appeared to ease, while the focus shifted to the U.S. Federal Reserve ahead of its rate-setting meeting.

The blue-chip FTSE 100 (.FTSE) rose 1.3%, extending gains from Monday when it advanced nearly 1%.

Fears of a global banking meltdown looked to ease after Swiss lender UBS (UBSG.S) agreed to buy its beleaguered rival Credit Suisse (CSGN.S) for $3.23 billion over the weekend.

“Investors at this point in time feel comforted with how this mini-banking crisis is being handled,” said Craig Erlan, senior market analyst at Oando.

British banks (. FTNMX301010) climbed 2.4% with the index on track for its best day in nearly three months.

Barclays (BARC.L) was among the top gainers, rising 4.8%.

Weakness in the pound also aided the exporter-heavy FTSE 100.

Investor focus would now shift towards the U.S. Federal Reserve’s upcoming interest rate decision as the two-day monetary policy meeting begins later today.

Recent turmoil in the banking sector sparked by the collapse of two regional U.S. banks coupled with troubles at European lender Credit Suisse prompted investors to sharply re-adjust their expectations around interest rate hikes.

The FTSE 100 has erased most of its early yearly gains, with the index now up only 0.5% on the year, due to the recent volatility.

Investors would be looking out for February UK inflation data due Wednesday; the final pit stop to gauge the state of the economy before the Bank of England’s decision on monetary policy tightening due Thursday.

FTSE 100 TECHNICAL ANALYSIS DAILY CHART:

weekly charts
  • FTSE 100 is currently trading in the down channel.
  • FTSE 100 is currently trading below 20&50 SMA.
  • RSI is in buying zone which suggests bullishness and Stochastic suggests an up trend.
  • Immediate resistance is at 7510.5 & its immediate support level is 7453.9

HOW TO TRADE FTSE 100 IN THIS WEEK

The FTSE 100 is currently forming a strong green bullish candle after finding support in its support zone; more upsides may now be conceivable if the resistance level is breached and if it can remain above the level.

TRADE SUGGESTION-BUY AT 7510.53, TARGET AT 7601.03, SL AT 7460.02