FTSE 100 shares in focus: miners, HSBC, Lloyds, IHG, Rolls-Royce, Barclays

The FTSE 100 index jumped by more than 1.50% on Friday after the UK published encouraging retail sales numbers. That report came a day after the latest UK GDP report showed that the economy contracted in the fourth quarter. Therefore, there is a likelihood that the Bank of England (BoE) will start cutting rates sooner.

The outlook for the FTSE 100 index is still neutral since, as shown below, it has found a strong barrier at £7,747. It has also formed an ascending triangle, a popular sign of a bullish continuation. This view will be confirmed if the price moves above the upper side of the triangle at £7,747. If this happens, it will raise the possibility of the index soaring to £8,050, its highest point in February 2023 and 4.3% above its current level.

FTSE 100 index chart

FTSE 100 mining companies in focus

This will be an important week for the FTSE 100 index as some of its biggest components publish their financial results. 

Mining companies like Rio Tinto, BHP, Glencore, and Anglo American are set to release their results this week. These results comes at a difficult time for mining companies as the commodity supercycle has ended.

Worse, many of these companies are struggling as some metal prices plunge. The most notable of these metals are lithium and nickel, which have crashed by over 50% in the past few months. This drop is because China has flooded the market with these metals as it boosts its EV production. 

China owns some of the biggest lithium and nickel mines in countries like the DRC and Indonesia. As a result, these companies are set to reduce the valuation of their lithium and nickel mines. The situation is so bad that Australia is planning to announce some tax credits for mining companies.

It is also so bad now that demand for EVs, including in countries like the United States, China, and Europe is easing. 

As I wrote recently, there are concerns about Glencore’s strategy to ditch coal and embrace these metals. In that article, I noted that Thungela Resources had outperformed Anglo American, its previous parent company.

Barclays, HSBC, Lloyds, Rolls-Royce  in focus

The other top FTSE 100 banks to watch will be the top UK banks like HSBC, Lloyds, and Barclays as they are set to publish their results. I have done a preview of Lloyds Bank and Barclays earnings here and here.

In all, judging by the recent bank earnings, there are signs that these companies will announce strong results because of high interest rates. However, they will also likely issue a cautious outlook now that rates are set to drop this year.

In its report on Friday, NatWest said that its annual profits soared to the highest point since 2007 in 2023. Its pre-tax profit jumped to over £6.2 billion in a year that it lost its CEO after going through a public relations nightmare. NatWest shares jumped by over 5%, helping lead other UK bank stocks.

Barclays and HSBC will be in focus for different reasons. HSBC is a big player in China, where the real estate and stocks have plunged. Barclays, on the other hand, will be watched keenly because of its investment bank.

The other notable FTSE 100 indices to watch will be the likes of Rolls-Royce Holdings, IHG, and BAE Systems. Rolls-Royce, one of the best-performing FTSE components, will publish its results on Thursday and provide more colour about the state of its operations. 

Other companies to focus on will be Hikma Pharmaceuticals, Jupiter Fund Management, Mondi, and WPP.