FTSE 100 live outlook prediction analysis for 31st March 2021
London’s markets underperformed against European peers but ended safely in the green as investors largely ignored Monday’s stock sell off, which was prompted by investment banks warning of huge losses over the Archegos scandal.
The FTSE 100 rose 35.95 points to 6,772.12, while the mid-cap FTSE 250 gained 138.9 points to 21,574.44.
Banks reversed Monday’s course to lead markets on the back of higher yields and optimism about a vaccine-led recovery. Barclays was the second biggest riser among blue-chips, adding 8.8p to 189.1p, shooting above last week’s high to its best levels since July 2018. Following closely behind were NatWest, HSBC and Lloyds.
Meanwhile, the pound hit a more than 12-month high against the euro as the UK’s vaccine rollout continues to outperform countries on the Continent
Stock Gains
Most Asian stocks look set to gain on the last trading day of the quarter as investors look to more U.S. stimulus, while wary of upward pressure on bond yields. Rates on the U.S. 10-year benchmark touched a 14-month high. Futures rose in Australia and Hong Kong, and dipped in Japan. The dollar strengthened for a second day and gold slipped below $1,700 per ounce to multi-month lows. Oil halted a two-day rally before the April 1 meeting of OPEC and its allies.
Overtaking Lane
China’s recovery from the pandemic means it could eclipse the U.S. economy by 2028, two years earlier than expected. In 2000, China’s GDP was just 11.8% of U.S. GDP. The country had recently launched a private housing market. Fast-forward to 2012 and China had joined the WTO, launched a huge infrastructure investment drive and Xi Jinping had come to power. With the exception of 2016, when China’s currency depreciated in value, the country has made steady gains on the U.S. each year. The coronavirus pandemic is the latest inflection point. China was the only major economy to expand in 2020 and its recovery from the virus meant it increased its share of global output at the quickest pace this century.
Super Spreader
Experts fear the Tokyo Olympics could trigger a global super spreader event. Organizers have released six “playbooks” detailing how they intend to pull off the world’s biggest sporting event safely in the middle of a pandemic. Even with the decision to exclude foreign spectators, more than 60,000 athletes and other essential attendees will converge on Tokyo from more than 200 countries — each with different rates of transmission, vaccination and viral variants. Tokyo has ruled out using two core tenets of containment: quarantines and vaccinations. Without those, experts say infections could spread. Meanwhile, the WHO’s chief says a report into the origins of Covid in China was too quick to dismiss the theory of a lab leak.[Bloomberg]
US & Asia Overnight from Bloomberg
Asian stocks edged lower Wednesday amid upward pressure on bond yields as investors await more details on the next leg of U.S. stimulus spending. The dollar extended gains as it wraps up its best quarter in a year.
Banks weighed on Japan’s equity gauge after Mitsubishi UFJ Financial Group Inc. joined the list of firms globally to take a hit from the meltdown at Bill Hwang’s Archegos Capital Management. Chinese shares retreated while Australia’s index outperformed. U.S. equity futures steadied after a lower close for the S&P 500 Index.
Ten-year Treasury yields advanced again in Asian trading, having touched a 14-month high of 1.77% before subsiding overnight. Gold traded around multi-month lows under $1,700 per ounce. Oil was steady before the April 1 meeting of OPEC and its allies.
Investors are watching the course of the U.S. growth rebound and its possible impact on inflation, amid concerns that a renewed rise in bond yields could hit some stocks. President Joe Biden is poised to unveil a large infrastructure package, and key jobs data are due Friday. The International Monetary Fund will upgrade its forecast for global economic growth next week.
FTSE 100 Outlook | Trading Signals | Forecast | Prediction | Analysis
Obviously we have the shorter week this week with markets closed on Friday, and today is the last day of the month. We may well see some profit taking later on today, especially if we get an initial rise this morning. End of quarter so expect a bit of manipulation to favour the Q1 bonus performance!
I am looking at 6740 for initial support today, where we have the green coral on the 2 hour chart and would be the first test of this since the colour change from bear to bull. The bulls will want to defend this area for a push up to the 6794 level again which was yesterdays high. Above that then 6815 is the main daily level to break as that would set up a fairly bullish April and a potential rise towards 7000. That said, we also have the fib at 6806 and R1 at 6799. So a cluster of resistance around here. The bulls do seem to be making hard work of it though with the S&P treading water really at the moment around the 3970 area.
The 30m chart is bearish to start with so we may well get an initial dip down from this 6765 level we are at as I write this. If we do then 6740 area is support as mentioned. S1 is also at 6735. Below this though and then 6713 for the fib level is next up and we also have the daily coral line here (though not the first test). A rise and dip today would fit pretty well and replicate the action on the ASX200 as well. Below 6713 and 6700 we would see a more significant slide, with S3 at 6670 and a definite bearish bias kicking in, with a potential test of the bottom of the Raff channels looming. They are around 6630 currently.
The S&P bulls do have their work cut out though looking at the 2 hour chart which has gone bearish – 3965 resistance on that, but 3945 support from the coral so a bit of a battle going on today on that by the look of it. The bulls will certainly be keen to defend the supports to keep alive the chance of a rise towards 4000 again.
So, thinking a rise and dip to play out today, then probably something similar tomorrow as new month money flows in and then positions are closed later on ahead of a 4 day break.
Good luck today
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