Could FTSE be the next major index to reach a fresh record high?

on May 13, 2014
Updated: Oct 21, 2019

Not a day goes by that we hear the words fresh “record” or “multi-year” high associated with a global stock index. This year alone equities in India, Germany and the US have all reached unchartered territories while the rest of Europe are playing catch up. Although some Asia Pacific markets are underperforming, stocks there have had a decent few days too.

The UK’s FTSE could be the next major index to reach a fresh record high. This morning the cash index reached a new 14-year peak as house building shares rallied after a positive update from Taylor Wimpey. However the index has since retreated a little after the German ZEW economic sentiment survey came in much weaker than expected. At 33.1 it was the lowest print for ZEW since January 2013, easily missing expectations of 41 April’s reading of 43.2. The eurozone version wasn’t great either: it printed 55.2 versus 63.5 expected. We had some weaker data from China overnight where industrial production growth slowed to 8.7% year-on-year in April compared to 8.9% expected and 8.8% in March. A 5% drop in shares of EasJet following the budget airline’s results has also weighed on the index slightly.

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Ahead of the UK employment figures and the Bank of England’s inflation report tomorrow, as well as the abovementioned data, there is scope for a small pullback in the FTSE over the very short-term. However the index does look poised to finally break higher, hopefully sooner rather than later, and reach fresh record highs. If and when the FTSE clears decisively above the 6885 area (please not the indices below are derived from the FTSE’s futures, so they have slightly different levels than the actual cash index) then we could see a run towards 6950 which was the intra-day record peak that was reached in 1999. Beyond that are the psychological 7000 barrier and then some Fibonacci extension levels as per the charts below. But we could go far beyond those levels over the medium term. The old resistance area of 6835/40 could turn into near-term support.
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[!fm[](/uploads/story/10934/ftse_100_chart_2.PNG)](# “”)


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