FTSE 100 Futures point to lower opening on Thursday

• FTSE 100 Futures were trading as low as 6,930 on Thursday (22 July)
• This is down nearly 1% from the previous day’s closing of 6,998
• The Footsie ended higher for a second straight day on Wednesday to post its best day in five months, led by travel and aviation stocks
• Monday’s ‘sudden drop looks more and more like a sudden air pocket’, says IG analyst Chris Beaucham
• Interested to go long or short on the FTSE 100 index? Open an account with us today.

FTSE 100 Futures: what’s the latest?

UK blue-chip barometer FTSE 100 index is down in overnight trading, IG data indicates.

IG's live FTSE 100 Futures price estimates showed the index trading at a median level of around 6,940 as at 05:30 GMT+1 on Thursday. Earlier, the index had hit as low as 6,930.

Why did the FTSE 100 close higher on Wednesday?

This represents a 0.8% decrease from the previous day’s gains, when the Footsie had posted its best day in five months to close 117 points higher at 6,998.

The rally was led by travel and aviation stocks, including aircraft engine maker Rolls-Royce, which recorded the largest increase of the day, up 7.7%.

This was closely followed by fashion retailer Next, whose share price rose 7.5%, after reporting strong sales and raising its profit forecasts in its latest financial results.

Meanwhile, travel and hospitality firms, including Premier Inns operator Whitbread (+6.1%), catering firm Compass (+5.6%), and British Airways parent company IAG (+5.6%), were the next biggest gainers.

This is a stark contrast from Monday’s performance, when the FTSE 100 had sunk 2.3% to a two-month low amid a rising number of coronavirus cases in the UK.

‘Tuesday’s rally has extended into a second day, and Monday’s sudden drop looks more and more like a sudden air pocket that produced excitement but little lasting impact,’ said IG chief market analyst, Chris Beauchamp.

What’s the FTSE 100 outlook?

Beauchamp believes that the bull market will get back on track again, ‘if Monday does turn out to have been a sudden summer squall’.

He added that the overall bullishness ‘will also bolster the ongoing parallels with 2013 and 2017, which both followed on the heels of volatile years but were themselves examples of quiet but relentless equity market rallies’.

IG’s client sentiment data shows that 73% of retail traders are net-long as of 22 July. On Tuesday (20 July), the number of traders on net-long hit 86.77%, the highest since 28 February this year.

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