The FTSE 100 index is struggling even after the latest interest in UK stocks. The index declined by almost 1% on Tuesday and is up by 0.13% in the futures market. Investors will focus on Wise (Transferwise) direct listing today.
FTSE 100 news. The biggest news in London today will be the direct listing of Wise, the company formerly known as Transferwise. The company will become the first firm to go public using a direct listing model. Unlike Deliveroo, analysts expect that the company will do well as a public company. This is because the fintech sector has done relatively well in the past few years. Also, its business has received a major boost by the pandemic.
The FTSE 100 index is also reacting to the intensified interest of UK businesses by American private equity firms. Earlier this week, it was revealed that a consortium led by Fortress was intending to acquire Morrisons. Other funds like Apollo and CDR are also considering bidding for the company.
According to the Financial Times, KKR is also expanding its British operations to target more companies. The company is setting up a team of five dealmakers to focus on UK companies. This is notable since KKR has moe tan $367 billion in assets under management. Other PE firms like Carlyle, Blackstone and Apollo are also said to be on the hunt for acquisition targets in the UK. They see these firms as being undervalued.
The daily chart shows that the FTSE index has been in a tight range recently. The index has also formed a rising wedge pattern that is shown in green. It is also above the 25-day and 50-day moving averages. It is also slightly above the important support at 6,970.
Therefore, while there are some bullish catalysts, there is also a possibility that the index will break out lower in the next few weeks as bears target the next key support at 6,970. On the flip side, a move above 7,000 will invalidate the bearish view.
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