FTSE 100 to trend higher on lockdown easing
IG’s FTSE 100 pre-market estimates point to the benchmark opening slightly higher on Tuesday.
- FTSE 100 Futures were trading as high as 7,135 on Tuesday (13 July 2021)
- This is up from the previous day’s closing of 7,125
- The Footsie ended higher on Monday, after the UK government confirmed that all remaining Covid-19 restrictions will be lifted from 19 July
- Airline stocks like IAG and easyJet, however, remained suppressed
- DailyFX analyst Justin McQueen says the index’s overall trend remains higher
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FTSE 100 Futures: What’s the latest?
UK blue-chip barometer FTSE 100 index is slightly up in overnight trading, IG data indicates.
IG's live FTSE 100 Futures price estimates showed the index trading at a median level of 7,129 as at 04:55 GMT+1 on Tuesday (13 July 2021). Earlier, the index had hit as high as 7,135.
This represents a slight increase from the previous day’s gains, when the Footsie had closed 3.54 points higher at 7,125.42.
Why did the FTSE 100 close higher on Monday?
The FTSE 100 finished higher on Monday, after UK Prime Minister Boris Johnson confirmed that the UK will lift all remaining Covid-19 restrictions, including the wearing of masks and the need for social distancing, from 19 July 2021.
‘We think now is the right moment to proceed... But it is absolutely vital that we proceed now with caution and I cannot say this powerfully or emphatically enough - this pandemic is not over,’ Johnson said during a press conference.
Early gains on Wall Street also helped to boost the Footsie in the latter half of the session. The S&P 500, Dow Jones Industrial Average and Nasdaq Composite indexes were up by 0.2%, 0.3% and 0.1% respectively as at the close of trading in London.
Joshua Mahony, senior market analyst at IG, said: ‘A slow start to the week has seen European and US markets enjoy marginal gains in a bid to follow Friday’s impressive surge for stocks.’
Despite the lockdown update, travel stocks remained under pressure throughout the session, with airlines suffering the largest losses. IAG concluded 4% lower, with easyJet not far behind on a 3.5% drop.
‘Airlines are likely to continue on a relatively bumpy path as the UK shows its willingness to allow Covid levels to surge as a result of the reopening efforts,’ said Mahony.
What’s the FTSE outlook this week?
While the FTSE continues to be in a consolidation phase and hold a 7000-7200 range, the overall trend remains higher, according to DailyFX analyst Justin McQueen.
That’s because the recent easing of lockdown measures will likely be reflected in the latest UK inflation figures, he said, adding that risks are thus ‘tilted to the upside’.
‘Similarly, inflationary pressures will be observed in the upcoming employment report, although, as the BoE (Bank of England) have stressed, the labour market will come into greater scrutiny once employment support programs expire in September,’ McQueen further noted.
‘That said, direction in the FTSE 100 will stem from broader risk trends as opposed to domestic data.’
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