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On Tuesday, the FTSE 100 in the UK faced a modest decline flitting between red and green attributed to a sell-off by overseas investors. This decline occurred as investors anticipated the release of global economic data later in the week. Despite this, there was positive news for Rolls-Royce as the engineering company forecasted a notable increase in its profitability. The FTSE 100, being significantly influenced by exporters, registered a 0.03% drop, reaching a two-week low during the day. Rolls-Royce shares have surged to a four-year high, marking a 4.23% increase. This achievement, the highest level since November 25, 2019, positions the engineering company as the top performer on London's blue-chip index. Rolls-Royce has unveiled ambitious financial targets, aiming for up to £2.8 billion ($3.53 billion) in operating profit in the medium term, a significant jump from the forecasted £1.4 billion for the current year. Additionally, the company is targeting a medium-term civil aerospace margin of 15%-17%, a notable increase from the 2.5% margin achieved last year. CEO Tufan Erginbilgic expressed confidence in these financial targets, deeming them compelling and achievable, surpassing any previous financial performance. The stock has already seen a remarkable increase of over 160% this year, underlining the positive momentum and investor confidence in Rolls-Royce's strategic direction and outlook.

Burberry's stock took a hit as HSBC lowered its price target on the stock, which they rated as 'hold'. HSBC noted that Burberry's repositioning efforts are underway, with new designer products set to hit shelves in September 2023. However, HSBC expressed concerns about the pricing strategy of the new collection, which will be 20% higher. In addition, HSBC raised doubts about the effectiveness of the turnaround due to a general slowdown in the luxury market and consumers' growing preference for well-established brands. Despite management's commitment to long-term targets, the bank was worried about a profit warning issued for FY23/24 in November. HSBC also pointed out that while the valuation might appear attractive, the lack of visibility adds to uncertainties. The commentary from HSBC saw Burberry investors shun the stock with shares shedding 3.16%, however, they were pipped to the bottom spot of the blue chip indeed by Pearson whose shares slid 3.69% on the session.

FTSE Bias: Bullish Above Bearish below 7400

• Below 7350 opens 7210
• Primary support at 7200
• Primary objective 7550
• 20 Day VWAP bullish, 5 Day VWAP bullish

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