The FTSE Finish Line - November 1- 2024

Patrick Munnelly, Partner: Market Strategy, Tickmill Group

FTSE Recovers From Three Month Lows

The UK's FTSE 100 index moved higher on Friday, recovering from near three-month lows reached Thursday, as advances in Reckitt Benckiser and energy stocks countered concerns over inflation caused by Britain's budget. Rachel Reeves attracted criticism for her first budget, which was heavy on spending, tax increases, and borrowing and short on economic growth. Both the FTSE100 & 250 indices were set to fall weekly due to concerns that Labour's expenditure plans would drive inflation higher, forcing traders to lower their expectations for rate reduction next year. However, investors believe that the Bank of England will decrease interest rates by 25 basis points next week. According to an S&P Global survey, British industrial activity fell marginally last month for the first time since April, as fewer new orders arrived. The blue-chip FTSE 100 gained 0.9%. Oil equities such as Shell and BP surged more than 1% each, while crude prices jumped almost 3% on claims that Iran was planning a retaliatory strike on Israel from Iraq in the coming days.

In single stock stories Reckitt shares rose 11.1% to 5,204 pence, topping the FTSE blue-chip index. Abbott and Reckitt's subsidiary Mead Johnson were cleared of culpability in a preterm formula case on Thursday. The complaint accused the businesses of failing to warn about the dangers of their premature newborn formulae. Reckitt shares have reached their highest level since March 15, while they are still down approximately 13% this year as of the last closing.

Boohoo shares jump 3% to 30.5p after selecting Dan Finley as CEO, starting immediately, to succeed John Lyttle. The appointment comes just a week after major investor Frasers urged its controlling shareholder, British entrepreneur Mike Ashley, to take the post. The stock has fallen 24.8% year to date.

Secure Trust Bank falls 22.3% to a record low of 440p, leading the FTSE small cap index decliners. The lender estimates its profit for fiscal year 2024 to be 10-15 million pounds lower than market projections. A court decision requires motor finance brokers to fully disclose commissions to customers when arranging car loans, causing a temporary halt in the lender's new UK motor financing operation. David McCreadie, CEO, expresses concern that it will take longer than projected to recover value from the excess level of defaulted Vehicle Finance amounts, and adds that the court verdict raises more doubt regarding the advantages to be realised in 2024. Secure Trust Bank's stock is down 17.7% year to date as of the latest closing.

Tesco, Britain's largest grocery operator, saw its stock jump 1.5% after announcing plans to return 700 million pounds ($902.51 million) to shareholders via an incremental share buyback.

Technical & Trade View

FTSE Bias: Bullish Above Bearish below 8225

  • Primary support 8000

  • Below 8000 opens 7855

  • Primary objective 8600

  • Daily VWAP Bullish

  • Weekly VWAP Bearish