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London's FTSE 100 extended Monday’s meagre gains on Tuesday, buoyed by robust performances in heavyweight banking stocks. Investors are closely watching a wave of corporate earnings reports and the U.S. Federal Reserve's upcoming decision on interest rates later this week. The banking sector surged 2.2%, reaching its highest level since May 2008. Notable gains included HSBC Holdings, up 2.9%, while NatWest Group and Lion Finance both advanced over 2%. Overall, the FTSE 100 index climbed 0.5%, marking a positive day for the blue-chip market. However, mining stocks retraced from recent highs, with the precious metals index sliding 2.2% and industrial metal miners dipping 0.7%. In other developments, Prime Minister Keir Starmer is scheduled to visit China on Tuesday evening, the first trip by a UK leader to the country in eight years. The visit aims to strengthen ties with the world's second-largest economy and reduce Britain's dependence on an increasingly unpredictable United States. Meanwhile, trade tensions remain in focus as U.S. President Donald Trump has threatened higher tariffs on imports from South Korea. This has heightened anticipation for corporate earnings reports, which investors hope will provide clarity on business conditions. The market’s attention is to shift to the US Federal Reserve’s policy meeting, which began on Tuesday and concludes on Wednesday with a highly anticipated announcement. Market consensus expects the Fed to maintain its current interest rates. A Reuters poll also indicated that nearly all economists predict the Bank of England will lower its interest rate to 3.50% in February. On the domestic front, fresh data revealed that UK retail prices surged at their fastest pace since February 2024, driven by rising costs in food, furniture, health, and beauty products.

In stock-specific movements, Dr. Martens saw its shares plummet 12%, making it the worst performer on the midcap index. The iconic bootmaker warned of flat annual revenue growth after reporting a decline in third-quarter sales. On a brighter note, Barclays upgraded Burberry to "overweight" from "equal-weight," citing its strong potential as a turnaround play for 2026. The price target was raised to 1,450p from 1,340p, signalling a potential upside of nearly 23.6%. Burberry reported a second consecutive quarter of positive retail comparables in fiscal Q3, reflecting the success of its Burberry Forward strategy. Currently trading at 1,179p, the stock has risen about 4% over the past year, with 21 analysts rating it as a "buy." Elsewhere, Sage Group emerged as the top performer on the FTSE 100, with shares climbing 3.2% to 1,076.5p. The British software company posted a strong 10% increase in Q1 revenue, totaling £674 million ($922.2 million), and reaffirmed its full-year outlook. Despite this positive performance, Sage shares remain down 14.9% in 2025.

TECHNICAL & TRADE VIEW - FTSE100

Daily VWAP Bullish

Weekly VWAP Bullish

Above 10150 Target 10300

Below 10070 Target 9950
 

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