HOUSEBUILDERS, PACKAGING SHARES LIFT FTSE 100; CPI DISAPPOINTS

FTSE 100 futures are currently trading at 7122-higher by 0.63% as compared to the previous closing. The contract, however, closed in the negative territory in the last trading session.

In the cash markets, the blue-chip share index inched up 0.90% to 7197.40 at the time of writing. The broad-market index rose today as positive results and hopes of a possible delay to exit from the European Union lifted housebuilders, while packaging firms DS Smith and Smurfit Kappa were boosted by the latter’s earnings.

The midcap index FTSE 250 was up 0.80% at the time of writing.

Housebuilders Persimmon, Barratt and Taylor Wimpey – among those most vulnerable to a no-deal Brexit – were among the biggest gainers today. Stocks rose after midcap Galliford Try reported higher first-half profit that exceeded Liberum estimates.

Investors also cited growing hopes that Brexit could be delayed if a EU divorce deal agreeable by all parties is not reached by 29th March. Britain’s exit from the bloc remains unclear with just over six weeks until the deadline as PM May on Tuesday asked lawmakers to give her more time to negotiate a deal acceptable to both Brussels and parliament.

Asian equities hit a more than four-month high today on trade talks optimism. This has helped in lifting stocks of Asia-focused companies. HSBC and luxury brand Burberry rose 1.22% and 1.81 respectively at the time of writing.

The best performer on the index was packaging group DS Smith which surged 4.2%. The packing group’s stock rose as rival Smurfit Kappa said the current year had started positively after reporting strong results. Stocks of Smurfit Kappa also added 4.23% at the time of writing.

Rolls-Royce’s stock climbed 3.72%. The automobile maker’s stock rose to a four-month high after a rating upgrade from Credit Suisse.

On the other hand, Tour operator TUI underperformed with a 7.7% fall. The stock extended losses from the previous session when the tour operator posted a bigger first-quarter loss.

British Inflation fell to a two-year low in January, dipping below the central bank’s target and offering some respite to households ahead of Brexit. The U.K. CPI (YoY) for January released earlier today came in at 1.8%. The index change was below the market expectation of 1.9% and also down from December’s 2.1%.

On the technical front, the RSI is currently at 66.50% and suggests that the market can move in the upward direction. The current price is above the MA5. The current price is above the middle line of the Bollinger Bands and is heading upwards.

Overall Bias is positive and short-term trades can be initiated with below mentioned Stop Loss and Profit targets.

 

Trade Suggestion- Limit Buy at 7110. Take Profit at 7150. Stop Loss at 7090

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