The FTSE Finish Line
Britain's blue-chip index relinquished early gains to slip into negative territory on Wednesday, initially buoyed by heavyweight banking and healthcare stocks, as investors digested a wave of corporate earnings. Heightened concerns over global trade dynamics have introduced a cautious tone, dampening bullish sentiment. This apprehension stems from persistent geopolitical tensions and trade policies that threaten to disrupt international supply chains. Recent reports reveal that U.S. President Trump has been advocating for substantial tariff hikes, urging the European Union to consider imposing tariffs as steep as 100% on imports from China and India. These measures would specifically target Russian oil imports, a contentious issue amid ongoing sanctions and trade disputes. Such developments underscore the intricate challenges of international relations and trade agreements, along with their potential impact on global markets and economic stability.
Shares of AB Foods dropped 11.9%, reaching a four-month low of 1,974.5p. This marks the biggest intra-day decline since June 2016 and positions it as the top percentage loser on London's blue-chip index, which has increased by 0.25%. The forecast for sales at Primark, its clothing division, predicts a decline of approximately 2% in H2 due to weak consumer sentiment in Europe. The overall performance of the food sector in H2 has met expectations. There is a robust demand for Primark in the UK, Ireland, and the U.S. However, growth at Primark has been challenging, and cautious consumer sentiment is starting to impact future prospects, according to analysts at Interactive Investor. Up to the previous close, the stock had increased by 10% this year.
Shares of Haleon, a British consumer healthcare group, rose 2.4% to 368.9p, making it a top gainer on the FTSE 100, which is up 13.39% YTD. Goldman Sachs upgraded its rating to "Buy" from "Neutral," raising the price target to 440p from 415p. The brokerage expects about 5% organic sales growth annually beyond FY25, driven by Oral Health. They foresee growth returning in North America by FY26 due to better inventory dynamics and innovation. Of 18 analysts, 11 have a "Buy" or higher rating, while 6 rated it "Hold" and 1 "Sell," with a median price target of 430p. However, including recent losses, the stock is down about 2% YTD.
Shares of DCC, a services provider, increased by 4.84% to 4,900p, making it the leading gainer on London's FTSE 100. DCC has finalised a shareholder returns plan worth 800 million pounds (~$1 billion) following the sale of its healthcare unit. This plan includes a 100 million pounds share buyback initiated in May, with an additional 600 million pounds tender offer set for November. The company stated that the final 100 million pounds will be returned in approximately two years after it receives a deferred payment from the sale. As of Tuesday's closing, the stock has risen 12.66% this year.
Technical & Trade View
FTSE Bias: Bullish Above Bearish below 9000
Primary support 9000
Below 8900 opens 8600
Primary objective 9600
Daily VWAP Bullish
Weekly VWAP Bullish
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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!