FTSE 100 consolidates above key support level amid mixed corporate updates

The FTSE 100 traded sideways on Thursday as London’s leading index consolidated recent gains above the key psychological support level of 7,500.

The 7,500 mark provided a stiff point of resistance in the early trading days of 2022 but has convincingly broke through to trade at pre-pandemic highs.

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Technical analysts will now be watching the FTSE 100 and a test of 7,500 to judge whether the index can build a base there for the next leg higher. The FTSE 100 was trading at 7,546 at midday in London.

FTSE 100 corporate updates

The FTSE 100 traded sideways as the market digested a number of corporate updates including Tesco’s festive trading update and and an instalment from Persimmon.

Persimmon shares were knocked down 1.7% after it missed some analyst estimates as completions were pushed back due to Omicron.

“With approaching 300 sites in operation, Persimmon have a lot of moving parts. Some analysts expected turnover to be a shade higher, but then again, the big jump in forward bookings, up from £1.32bn to £1.62bn suggests that demand is fine and most likely, some completions slipped over the year end as Omicron raced through workforces up and down the country,” said Clayton, fund manager at HL Select.

“Having stepped up land purchases, Persimmon should be able to capitalise on demand, so long as they can get the planning system to work for them. With sales rates up 20% in the second half the company is well positioned for the new year.”

Following a fairly respectable update from Sainsbury’s yesterday in which they upped their profit guidance, helping shares rise on the day, investors showed some disappointment with Tesco as shares gave up 1.5% in Thursday morning trade.

“Despite a strong Christmas and a small upgrade to forecasts, Tesco didn’t do enough to impress the markets, at least in early trading on Thursday,” said AJ Bell investment director Russ Mould.

“However, there was still plenty to please long-term investors. The more focused strategy progressed under Dave Lewis and his successor Ken Murphy has helped deliver the supermarket’s highest market share in four years.”

“Tesco’s online sales continue to track much higher than pre-pandemic levels. This is important as the greater scale in this part of the business is improving its profitability.”

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