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London stocks will continue to advance as UK rate hike fears fade

By on December 9, 2021 0

FTSE 100 courses, news and analyzes:

  • The Bank of England appears increasingly unlikely to hike UK interest rates next Thursday as the UK government announces new measures to curb the Omicron variant of Covid-19.
  • This is positive for the FTSE 100 index of major stocks listed in London.

FTSE 100: more earnings to come

The FTSE 100 index is well positioned to extend its recent rise ahead of the Bank of England’s decision on UK interest rates next Thursday. Once considered almost certain, a rate hike has become less likely due to the spread of the coronavirus variant Omicron.

This is positive for British stocks even though the government has already responded by toughening pandemic rules in England. Masks will now need to be worn in most indoor public places and employees have been advised to work from home if they can.

As shown in the chart below, the index is now close to the November 12 high at 7,405, and if broken, it will return to levels not seen since February 2020.

FTSE 100 price chart, daily period (July 8 – December 9, 2021)

Source: IG (You can click this for a larger image)

UK GDP figures are due

As for UK economic news, the next big data will be tomorrow’s GDP, industrial production and trade figures. Year-on-year economic growth is expected to moderate to 4.9% from 5.3% previously, while the merchandise trade deficit is expected to narrow slightly and industrial production is expected to decline. to have decreased.

Retail traders data is bullish

As for IG positioning figures, the last rretailer data in detail spectacle35.24% of traders are net-long the FTSE 100, with the ratio of short / long traders at 1.84 to 1. The number of net-long traders is 5.67% lower than yesterday and 53.12% lower than last week, while the number of net-short traders is 10.35% higher than yesterday and 180.88% higher than Last week.

At DailyFX, we generally take a contrarian view of crowd sentiment, and the fact that traders are net short suggests the The FTSE 100 could continue to rise. Traders are even sharper than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger FTSE 100 bullish countercurrent trading bias.

– Written by Martin Essex, Analyst

Please feel free to contact me on Twitter @MartinSEssex

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