The FTSE 100 is shining today as investors continue to focus on the ongoing reopening and the likelihood of more stimulus by the Bank of Japan. The index is up 0.85% and is trading at £6,316, which is the highest it has been in more than a week. Other indices in Europe are also rising, with the DAX index and CAC 40 up by 0.70% and 1.07% respectively.
A key driver for the FTSE 100 today is the Bank of England (BoE), which will start its monetary policy meeting today. Analysts expect that the bank will leave interest rates unchanged and possibly launch more stimulus. This stimulus could be worth about £200 billion.
The bank is in a difficult situation since inflation is struggling. As we reported earlier today, the headline consumer prices rose by just 0.5% in March after rising by 0.8% in the previous month. The core CPI, which measures the change in prices excluding the volatile food and energy products rose by 1.2%, down from the previous 1.4%. Therefore, it is clear to see that the inflation is below the bank’s target.
By announcing more stimulus, the BOE will not be alone. Just yesterday, the BOJ announced that it would boost its lending to businesses. And the Fed is implementing an open-ended quantitative easing program. Just yesterday, the bank said that it would start buying individual corporate bonds. And the ECB recently increased its asset purchases.
The biggest mover in the FTSE 100 today is SSE Corp, whose shares have risen by more than 8%. SSE is an energy company that provides power to many homes in the UK. The next company is Berkeley Group, Ashtead Group, easyJet, and BT Group. Shares in easyJet have been on an upward trend after the company started flying.
On the other hand, the worst-performing companies in the FTSE 100 are Rio Tinto, Bunzl, Halma, Aviva, and Fresnillo. Their share prices are down by more than 0.20% respectively.
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On the daily chart, the FTSE 100 has made a significant milestone. As you can see below, it has moved above the 50% Fibonacci retracement level at £6234 and above the yesterday’s high of £6,290. Also, the index has moved above the 100-day exponential moving average. Also, the Smart Money Index (SMI) has been rising. This means that bulls are slowly taking control. As such, the price could continue rising as bulls target £6,400.
On the flip side, a move below £6,100 will invalidate this prediction. This price is not only an important psychological level but is also along the 50-day EMA.