The FTSE 100 index has started the year well as it surged to a record high. It moved to a high of £8,645, up by over 75% from its lowest level in 2020 and by 15% in the last 12 months.
The next few weeks will be important for the FTSE 100 index as the Bank of England (BoE) delivers its first interest rate decision and as many constituent companies release their financial results. So, let’s explore the key catalysts for the Footsie and the top companies to watch next week.
Bank of England’s decision
The Bank of England’s decision, scheduled for Thursday next week, is the main catalyst for the FTSE 100 index.
This will be an important meeting since analysts anticipate that the BoE will start its pivot into a more dovish view. In this, there is a likelihood that the bank will cut interest rates by 0.25% and then point to more cuts later this year.
The BoE has been more cautious than the Federal Reserve and the European Central Bank (ECB). It slashed interest rates two times last year and maintained a cautious tone because of inflation.
The rising hopes of a dovish tone explain why UK Gilt yield have pulled back. Data shows that the 10-year trend has moved from 4.90% to 4.55%, while the 5-year trend has moved from 4.70% to 4.3%. The FTSE 100 index will likely do well if the BoE turns dovish in this meeting.
Top corporate earnings
Corporate earnings will be the key catalysts for the FTSE 100 index next week. Diageo, the giant alcohol manufacturer and parent company of popular brands like Guinness, Johnie Walker, Baileys, and Smirnoff, will be the first big FTSE 100 company to release its financial results.
These numbers will come at a time when the Diageo share price has been under pressure. It was trading at 2,400p, down by 37% from its highest level during the pandemic. This weak performance is in line with most alcohol stocks like AB InBev and Molson Coors.
Healthcare giants in the FTSE 100 index will also be in the spotlight next week. GSK and AstraZeneca will publish their numbers on Wednesday and Thursday. GSK share price remains in a deep bear market after falling by 21% from its highest level in 2024, while AstraZeneca has dropped by 15%. Therefore, these results will likely provide a catalyst for the two firms.
Vodafone, the giant telecom company, will release its results on Tuesday. Like other top FTSE 100 companies, the Vodafone share price has remained under pressure in the past few months as investors watch the ongoing turnaround strategy. Its stock was reading at 68p, down by 10% from its 2024 highs.
Entain, the parent company of Ladbrokes, EuroBet, Coral, and BetMGM will also release its results at a time when there are concerns about the industry.
FTSE 100 index analysis
The weekly chart shows that the FTSE 100 index made a strong bullish breakout and hit a record high this week. It moved above the important resistance level at £8,476, the previous all-time high and the upper side of the ascending triangle pattern. The FTSE 100 index has remained above the 50-week moving average.
Therefore, the FTSE 100 index will likely continue rising as bulls target the key psychological point at £9,000.
The post FTSE 100 forecast: BoE decision, Diageo, Vodafone, GSK earnings appeared first on Invezz