FTSE 100 watch: Footsie dips as ECB-fuelled rally fizzles out

Rolls-Royce shares rally after engine maker’s latest update

FTSE 100 watch: Footsie dips as ECB-fuelled rally fizzles out

The UK benchmark index has lost ground in today’s session, giving up most of the gains posted following the European Central Bank’s (ECB) policy decision yesterday. Rolls-Royce Holdings (LON:RR) meanwhile has spiked to the top of the FTSE 100 leaderboard after forecasting that it will exceed its 2020 free cash flow target.

FTSE 100 loses ground

As of 12:22 BST, the Footsie had lost 61.09 points to stand 0.79 percent lower at 7,704.70. The blue-chip index, however, remains on track to post a gain for the week, following the previous session’s rise prompted by the ECB’s announcement that it will refrain from hiking rates until next summer.

“The FTSE 100 bounced spectacularly off trendline support yesterday, but it has once again stalled around the 7,770 area,” Chris Beauchamp, market analyst at IG, commented in a note. “A firm push above 7,800 opens the way to the recent record highs at 7,900. The bullish outlook remains unless we see a move back below 7,650.”

Individual Footsie risers

Rolls-Royce has been today’s most prominent Footsie riser, having gained 7.75 percent to 951.20p, after saying that it was now well-placed to exceed its  free cash flow target of £1 billion by 2020 and unveiling a mid-term target of free cash flow per share to exceed £1.

“The company’s new mid-term ambition of more than 1 pound per share in free cash flow implies more than 1.8 billion pounds in total free cash flow. This is well ahead of 2020 company compiled consensus,” said Goldman Sachs analysts, as quoted by Reuters.

Tesco (LON:TSCO) meanwhile is 2.16 percent up at 255.20p after reporting that its like-for-like sales growth had improved to 1.8 percent in the 13 weeks ended May 26. 

The FTSE 100 was 0.74 percent down at 7,708.57 points as of 12:46 BST on Friday, 15 June 2018.

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