The FTSE 100 Finish Line - Tuesday, March 17

The FTSE 100 in the UK made modest gains on Tuesday, supported by robust performances in energy stocks and major financial institutions, even as geopolitical tensions in the Middle East lingered. Investors remained focused on the Bank of England's upcoming interest rate decision later this week. The blue-chip index rose 0.6%, signalling cautious optimism among traders. Meanwhile, escalating conflict saw Iran intensify its attacks on the UAE, as the U.S.-Israel confrontation with Tehran entered its third week. This turmoil has severely disrupted oil shipments through the critical Strait of Hormuz, pushing crude prices up by 4%. The energy sector responded with a 1.1% surge, reaching record highs. Industry leaders BP and Shell both climbed over 1%, recovering some losses from earlier in the week. This week’s focus is squarely on interest rate decisions across the UK, U.S., and Europe, as central banks weigh their options to address inflationary pressures fuelled by surging energy prices. A Reuters poll indicates that most economists have abandoned expectations of a rate cut in March, now forecasting a 25-basis-point reduction either in April or June. However, J.P. Morgan maintains a cautious outlook, predicting the Bank of England will hold rates steady until 2026, with the earliest cut anticipated in early 2027

Elsewhere in the market, major banks posted a modest 0.6% uptick, while utility stocks outperformed with a notable 1.4% increase. On the economic front, British borrowing costs fell for the second consecutive day, though they remain well above pre-crisis levels. Market sentiment is divided, with traders pricing in a roughly 50% chance of a Bank of England rate hike in November. On the corporate front, Close Brothers suffered a sharp 10.4% drop, landing at the bottom of the mid-cap index after revealing plans to eliminate 600 jobs by fiscal year 2027. In contrast, Trustpilot soared by an impressive 23%, driven by news that the global online review platform had quadrupled its annual profit.

TECHNICAL & TRADE VIEW - FTSE100