FTSE stagnant at a five-month high
The blue chip share index remain stagnant this week after hitting a five-month stall just above its key 6,700 points level as the mixed crop profit led to the profit takeover alongside bad weather restrained activities.
Airlines were among those badly hit by profit taking as a massive storm interrupted flights this week with Easyjet dropping 2.3 % while AIG, which owns majority of Iberia and British Airways plummeted 1.2 % respectively. Moreover, insurers were also badly affected with Prudential, resolution and Aviva were off 0.3 to 0.6 %.
There have been a lot of insurance companies, possibly the expected cleanup bill that could have made an impact in reference to the worst storm to hit the U.K. in several decades as hurricane-strength winds decimated parts of the country.
In addition, there were also several large sellers in Easyjet which were mainly from leveraged accounts and with the broader market ongoing, the weather meant a reduced activity as many people were not able to report for work. Volumes on the FTSE 100 were working at 80 % capacity on a 90-day average as compared to a 92 % as against the Eurozone Eurostoxx 50.
On the lighter side of things, although the storm could have resulted like a fortunate thing in the likes of temporary energy providing companies such as Aggreko was instrumental to this week’s gainers. It jumped 6 % following an expected underlying margin and revenues to lead the race for this year both in the second half as well as on a full-year basis.
Apart from the potential business from the undesirable weather conditions, traders were still broadly in-line with figures that prompted a broadly squeezed in-line figures in stocks as investors took off the “short” bets on possible future falls in the prices of shares.
The FSTE 100 was able to close up 4.48 or 0.1 % at the 6,725.82 level which showed an uneasy indication that it is losing out of steam after it scaled a five-month intra-day high of just 6,739.66 points.
It has been tremendously stood steadfast for several weeks according to several technical analysts and it is still too early to give a substantial bet against the recent rise. However, we look closely at the historical charts there are close data that suggest a massive resistance in the following months.
The FTSE has to face a lot of possible challenges immediately which it should be very wary of. The 6,760 areas which served as a peak in nearly four years ago before it dropped down to a sharp correction.