The UK economy is heading towards contraction

London Wrap – FTSE treads water around 7100.

Posted Friday, March 1, 2019 by
Neil Wilson • 1 min read

The FTSE 100 bounced off support around the 7060 level and has regained the 7100 handle in a bullish session to end the week on.

At send time the blue chip was up 0.5% to trade at 7107, keep itself above yesterday’s highs. Look for a close above yesterday’s peak at 7107.20 to signal a bullish pivot and perhaps mark the end of the week’s retracement. Could be a fight to keep it above this – much depends on the relative performance of the pound.

A weaker pound has lifted the FTSE, with GBPUSD easing back from 1.33 handle to trade around 1.3240. Whilst the pound has been bid up in hopes for a Brexit deal to pass, this is very much a case of hope over expectation and for now traders remain cautious in bidding up cable much beyond 1.33.

WPP was the top riser, putting a 7% gain after an upbeat update. Luxury stocks like Burberry were also strong after Moncler’s stellar numbers, and a very positive report from Sotheby’s in New York yesterday. Rightmove was the biggest faller, dropping 6% after its annual results, while Relx was the biggest drag, shaving 3 points off the index. Defensives BAT, AstraZeneca, Diageo and GSK were among the main contributors to the FTSE’s gains.

All sectors except for Industrials, Telecoms and Tech were in the green, with Consumer Cyclicals the biggest advancers.

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