The FTSE 100 of Britain maintained its impressive ascent on Monday, propelled by a succession of favorable corporate updates. One article reported rumors that mining behemoth BHP Group (NYSE:BHP) was considering an increased buyout offer for Anglo American (JO:AGLJ).
Why Does The FTSE 100 Keep Moving Higher?
According to David Cumming, Head of UK Equities at Newton Investment Management, a multitude of companies are exhibiting encouraging signs, suggesting that this upswing is not transitory in nature.
Investing interest has been rekindled in British equities following indications of inflation stabilization, currency depreciation, and economic resurgence, all of which have caused a reversal in their historical underperformance relative to their international counterparts.
Despite ongoing concerns regarding possible postponements in interest rate cuts by the U.S. Federal Reserve, market sentiment indicates that the Bank of England is more likely to commence rate reductions in August.
FTSE 100 Index Gainers & Losers
The shares of Anglo American increased by 1.7%, according to reports that BHP Group is considering a revised bid following the rejection of its initial $39 billion proposal. "The prevailing sentiment is that the offer is inadequate," Cumming observed. BHP may be compelled to renegotiate the agreement or run the risk of forfeiting Anglo at this price.
In contrast, Petrofac (LON:PFC) experienced a historically low price decline of 23.8%. This decline was precipitated by the extension of a $300 million credit line by a group of noteholders to the struggling petroleum services provider and the postponement of the publication of its full-year results until May 31.
FTSE 100 Forecast Technical Analysis
In the daily chart of UK100, the ongoing buying pressure is valid, which has reached the 16121.8% Fibonacci Extension level from the existing price swing. However, the broader market context is bullish as the 100-day Simple Moving Average is above the current price with a bullish slope.
Moreover, Oscillators show an overbought market condition, while the Relative Strength Index (RSI) remains at the 70.00 level.
Based on the current price structure, a considerable downside correction is pending in this stock. The stock is trading higher and has reached an overextended level, from which decent downside pressure might come. Therefore, any bullish rebound from the 8000.00 to 7900.00 zone could be a trend continuation signal, targeting the 8442.00 level.
