FTSE 100 Forecast Ahead of AB Foods, DS Smith, Berkeley Earnings

Summary:
• The FTSE 100 index sell-off is accelerating as concerns about inflation continued. The Footsie is trading at £6,991

The FTSE 100 index sell-off is accelerating as concerns about inflation continue. The Footsie is trading at £6,991, the lowest it has been since March 10th. It has fallen by more than 9% from its highest point this year. This means that it has outperformed American indices like the Nasdaq 100 and Dow Jones, which have crashed by more than 20% this year.

Key FTSE earnings to watch

The FTSE 100 declined after the latest corporate releases published last week. Companies like Asos and Boohoo published remarkably weak results, pushing their share prices sharply lower. Meanwhile, the strong commodity prices helped supercharge Glencore’s profits. 

The firm expects its first-half profit of $3.2 billion will be slightly lower than its 2021 profit of $3.7 billion. Other FTSE mining companies like BHP, Rio Tinto, and Anglo American are expected to have a similar performance.

The key catalyst for the FTSE index will be the upcoming UK inflation data that will come out on Wednesday. Analysts believe that the country’s consumer inflation rose to 9.1% in May as the cost of energy continued surging. This inflation will put pressure on the Bank of England to continue tightening, which will affect FTSE homebuilders like Persimmon and Barratt Development.

The index will also react to the upcoming corporate earnings from leading British companies like Associated British Foods, Berkeley, DS Smith, and Carnival. For most of these companies, focus will be on how they managed to weather inflationary pressures. Other smaller companies expected to publish their results are Volex, First Property Group, and Naked Wines.

FTSE 100 forecast

The daily chart shows that the FTSE index has been in a strong bearish trend in the past few days. Nevertheless, it has managed to move below the important support at £7,153, which was the lowest point on May 11th. The index has also moved below the 25-day and 50-day moving averages, while the MACD has moved below the neutral point. A closer look shows that it has formed a triple-top at £7,666. 

Therefore, there is a likelihood that the FTSE 100 index will continue falling as sellers target the key support at £6,750, which was the lowest point on May 7th. However, a move above the resistance at £7,153 will invalidate the bearish view.