The FTSE Finish Line - August 3 - 2023
FTSE BoE & BT Sour Sentiment
The FTSE 100 index faced further downward pressure due to the decline of two prominent companies on Thursday. Telecom firm BT Group and consumer staples major Unilever both fell, with their shares trading ex-dividend. BT Group's stock dropped by 5.5%, while Unilever's shares experienced a 1.8% decrease.Among the various FTSE 350 indexes, the pharmaceuticals and biotech sector saw the most significant decline, falling close to 2% and leading the overall market declines.
Budget carrier Wizz Air also faced a considerable setback, losing 5.8% after warning of a slower capacity growth rate.Aero-engineer Rolls-Royce Holdings experienced a 1.7% fall after the company's CEO mentioned that the early stages of its transformation program were delivering strong improvements. However, he also stated that the rate of improvement might not be sustained at the same level. Amidst the broader decline, communications infrastructure firm Helios Towers was a standout performer, surging 6.9%. This boost in Helios Towers' stock came after the company tightened its full-year 2023 guidance to the upper end of its forecast range, signalling positive market sentiment towards the company's prospects.
On the fundamental front The Bank of England (BoE) has implemented a 25bps rate hike, with a warning that borrowing costs are expected to remain elevated for the foreseeable future. Surprisingly, the response from equity markets was largely optimistic, particularly benefiting homebuilders and the real estate sector. Initially, there was a sense of relief among traders who had anticipated a more substantial 50bps rate increase. This relief likely contributed to the initial positive market reaction. However, as the trading session progressed, some indices moderated and pared back some of the initial gains. Overall, the rate hike's impact on equity markets appears to have been complex, with multiple factors influencing the market's behaviour. The real estate and homebuilding sectors, in particular, seemed to benefit from the rate hike, potentially due to the signal of a robust economy and increased demand for properties. Nonetheless, cautiousness and vigilance prevail as investors closely monitor the central bank's guidance on future rate movements and its impact on the broader market.
FTSE Intraday Bullish Above Bearish below 7650
Below 7550 opens 7400
Primary support is 7400
Primary objective 7750
20 Day VWAP bullish, 5 Day VWAP bearish
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!