FTSE 100 futures trading higher as UK equities extend gains this week

FTSE 100 futures are trading higher after market close, with UK equities extending gains as the UK economy slowly emerges from lockdown.

FTSE 100 futures are trading 1.5% higher after market close, with UK equities extending gains as the UK economy slowly emerges from lockdown.

UK equities has benefitted from the UK government unveiling its roadmap for reopening the economy, which has lifted investor sentiment, though challenges still remain with the path out of lockdown full of uncertainty.

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FTSE 100 closes on a high despite poor US data

The FTSE 100 closed in positive territory again on Thursday, ending the day 1.2% higher at 6218.

The blue-chip index stay strong despite disappointing data from the US which showed that more than 40 million Americans have made new unemployment claims since the pandemic began, with an additional 2.1 million joining the unemployment line last week.

US-China tensions could spoil rally

UK and US equities have seen significant gains over the last few weeks, but the recent rally could end early if tensions between the Beijing and Washington continue to worsen.

‘Resilience in equities comes at an odd time… as data begins to worsen as we head further into the second quarter (Q2) and US-China tensions begin to rise,’ Chris Beauchamp, chief market analyst at IG said.

‘But overall investors continue to look beyond Q2, hoping for growing signs of a rebound,’ he added.

FTSE 100 pulling back from key resistance

The FTSE 100 is easing back this morning, following on from a rally into the 6211 resistance level from late April, according to Josh Mahony, senior market analyst at IG.

The recent uptrend remains intact given the continued creation of higher highs and lows, yet we could see the index pull back as we respect the 6211 level, he said.

‘Nevertheless, unless we see the index fall below 6040, such a pullback would likely represent a short-term retracement rather than a wider reversal,’ Mahony added.

‘As such, we could see short-term downside today, yet a bullish trend is in place unless that 6040 level is broken.’

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