The FTSE Index has rebounded by over 5% from its lowest level this month, outperforming other top indices like the S&P 500 and Nasdaq 100. This article explores some of the top catalysts that will impact the blue-chip Footsie Index this year.
FTSE 100 Index to react to key indices in April
A key catalyst for the FTSE 100 Index will be the upcoming corporate earnings from some of the biggest constituent companies.
Tesco, the biggest retailer in the UK, will publish its earnings on April 16. Its results will provide more information about the country’s retail sector as it remains in a stagflation, a period characterized by high inflation and slow economic growth.
Associated British Foods, the company behind Primark, will publish its results on April 21. The other top companies that will publish their earnings in April will be BP, Barclays, AstraZeneca, GlaxoSmithKline, Lloyds Bank, Haleon, Endeavor Mining, and Standard Chartered will release their financial results.
Barclays Bank’s earnings will likely benefit from the volatility caused by the ongoing US-Iran war because of its trading business. Banks are also benefiting from the ongoing energy price surge, which will make it hard for the Bank of England (BoE) to cut interest rates.
The FTSE 100 Index will also react to the upcoming US earnings season, which will start on April 10 when companies like BlackRock, Goldman Sachs, JPMorgan, Morgan Stanley, and Netflix release their financial results.
Bank of England interest rate decision
The other main catalyst for the FTSE 100 Index will be the upcoming monetary policy decisions by the Federal Reserve and the Bank of England (BoE).
The Fed will deliver its interest rate decision on April 29th, while the Bank of England will deliver its decision on April 30th.
Economists expect the two banks to leave interest rates unchanged as officials observe the ongoing price surge.
Data shows that the UK gas price has jumped by 18% in March and by 82% this year. The country’s fuel prices have also continued soaring, with Brent soaring by 40% in the last 30 days.
The most recent macro data showed that the UK’s inflation has remained at an elevated level. The headline Consumer Price Index (CPI) rose to 3.0% in February, while the core CPI jumped 3.2%. Analysts expect British inflation will jump to 5% this year.
The Federal Reserve is also expected to remain unchanged in the upcoming meeting as US inflation continues rising, with the OECD expecting the US inflation to move to 5%.
US and Iran war
The FTSE 100 Index will also react to the ongoing US-Iran war, which has been going on since February this year.
While Donald Trump has expressed optimism that the war will end soon, Iran holds substantial cards.
It has full control of the Strait of Hormuz, where 20% of oil passes through. It also has links to Yemen’s Ansah Allah, popularly known as Houthis, who may decide to prevent shipping in the Red Sea.
Therefore, there is a risk that the ongoing war will continue in April, which may lead to more pressure in global stocks, including the FTSE 100 Index.
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