The FTSE Finish Line – July 04

The FTSE Finish Line – July 04 – 2023

FTSE Flatlining With US Investors Offline For July 4th Holiday

On Tuesday, the UK’s FTSE 100 index remained relatively unchanged, down 0.09%. The index, which is heavily influenced by commodity stocks, has seen limited gains so far this year due to concerns about a global economic slowdown and high inflation, leading to expectations of further tightening of monetary policies. 

In today’s session, losses in mining stocks were observed as a result of a downbeat outlook on Chinese demand. However, healthcare stocks rebounded following a previous day’s slump, helping to offset the losses, with AstraZeneca recovering 2.01% of yesterday’s slide. Industrial metal miners slipped by 0.6%, tracking the early decline in most base metal prices due to weak economic data from China, which raised concerns about demand. 

On the earnings front Sainsbury’s, the second-largest supermarket group in Britain, saw a decline of 1.6% after reporting quarterly results. Although the company maintained its financial guidance for the year and reported a 9.8% rise in underlying sales for the first quarter driven by inflation, competition concerns weighed on the shares as online grocer Ocado continued to shine up 1.3% on the session.

On the negative side of the ledger UK homebuilders experienced a decline in their stock prices as JP Morgan raised concerns about a potential slowdown in sales. The UK housebuilders’ index fell by 1.5% as analysts from JP Morgan noted that uncertainty in interest rates could lead to a softening in sales rates, jeopardising volume estimates for all UK homebuilders in 2024. JP Morgan also highlighted the possibility of affordability-driven average selling price declines. As a result, the brokerage downgraded its rating on Persimmon to “neutral” from “overweight” and reduced the target price from 1,600p to 1,090p. They expressed scepticism about the company’s potential for a recovery in the near term. Additionally, JP Morgan lowered its target price on all eight constituents in the sector index. Among the homebuilders, blue-chip companies such as Berkeley, Barratt, Taylor Wimpey, and Persimmon also saw their stock prices decrease by 0.9% to 1.9%, making them some of the top percentage losers on the FTSE 100 index. Overall, the housebuilders’ index has declined by approximately 2% year-to-date. With regards to to the top and bottom spots for percentage losses and gains, recently promoted to the blue chip 100 index, engineering firm IMI sits at the bottom of the table shedding 2.52% as Segro holds the top spot adding to yesterdays solid performance of 1.34% return with gains of 2.18% today.

FTSE Bias: Intraday Bullish Above Bearish below 7510

• Above 7550 opens 7660

• Primary resistance  is 7660

• Primary objective 7330

• 20 Day VWAP bearish, 5 Day VWAP bullish