The FTSE 100 index retreated for four straight days as investors came to terms with Donald Trump’s victory and what it means for UK and global equities. It also retreated as investors focused on the interest rate cuts by the Bank of England (BoE) and the Federal Reserve.
The Footsie dropped to £8,140, down by 4% from its highest level this year. This is a sharp contrast to what happened in the United States, where the Nasdaq 100 and S&P 500 indices surged to their record highs.
The Bank of England delivered its second interest rate cut of the year and hinted that it would deliver more gradual cuts in the coming months. Analysts see the bank cutting three to four times by December next year.
Top FTSE 100 shares to watch next week
The FTSE 100 index reacted to several important corporate earnings from UK companies. The most notable one was BT Group, one of the top telecom companies in the UK, which published weak financial results and slashed its guidance. As a result, the BT share price retreated by over 1% on Thursday.
National Grid, one of the biggest players in the utility industry, was also in the spotlight after publishing mixed results. The company published strong financial results, with its earnings per share rising to 28.1 pence, up from 25.9 pence in the previous period. It also maintained its guidance and investment plans.
Asos was the other top UK company that published mixed financial results. The fast fashion company said that its sales in the UK crashed by 12% in the first nine months of the year. Revenues dropped by 16% to £2.9 billion even as the management hinted that the turnaround was still on track.
Looking ahead, the FTSE 100 index will be in the spotlight next week as top companies in the index publish their financial results.
The most important one will be Vodafone, one of the biggest companies in the telecom industry globally.
Vodafone’s results will come out as the company continues to implement its turnaround strategy. As part of this turnaround, the company has exited some key markets like Spain and Italy as it narrows its focus to Germany, the UK, and some other markets.
The Vodafone share price will react to its performance in Germany and whether its service growth is continuing. If this happens, there is a likelihood that the Vodafone share price will bounce back above the 200-day moving average at 71.60p.
Intermediate Capital Group (ICG) earnings
The other important FTSE 100 share to watch will be Intermediate Capital Group, one of the biggest private equity companies in Europe. ICG, like other top companies in the industry, has done well this year as it jumped by 33% from January.
Some of these gains happened after the company raised billions of dollars for its private credit fund. Therefore, these results will provide more color about the state of the company and what to expect.
Most notably, the management will provide more information about what the new Trump administration means for business. Most analysts believe that the Trump era will lead to more corporate activity in the longer term.
The other big FTSE 100 company to watch next week will be Aviva, one of the top insurance companies in the UK. It will release its results on Tuesday. Aviva, a top dividend stock in the UK, has retreated by over 8.5% from its highest level this year amid tightening insurance regulations.
Aviva share price has dropped below the 200-day moving average and formed a bearish flag pattern. Therefore, there is a likelihood that the stock will have a bearish breakout in the coming months. If this happens, the next point to watch will be at 400p.
More FTSE 100 shares will be in the spotlight. The most notable ones are Land Securities, Great Portland Estates, and Flutter Entertainment. Flutter is the parent company of popular brands like Fanduel, Sportsbet, Pokerstars, and Sky Betting.
FTSE 100 index analysis
Turning to the daily chart, we see that the FTSE 100 index has been in a tight range in the past few months. It has remained inside the key support and resistance point at 8,115p and 8,472p – with occasional false breakouts – since May 15.
The index has remained above the 23.6% Fibonacci Retracement point and the 200-day moving average at £8,100. Also, it has formed a bullish flag chart pattern, a popular positive sign in the market.
Therefore, the index will likely bounce back in the coming months as investors react to the Fed cuts and the Trump administration. If this happens, the next point to watch will be at £8,400. A break above that point will lead to more gains to £8,472.
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