​When will the FTSE 100 hit 9,000?​

​​​FTSE 100: the great underperformer

​The FTSE 100, up around 7.5% year-to-date (YTD) and thus marginally outperforming the STOXX Europe 600 index, is nonetheless greatly underperforming some of its European peers such as the DAX 40 and US ones like the NASDAQ 100, up over 15% and 25% respectively.

​FTSE 100, STOXX 600, DAX 40, NASDAQ 100 year-to-date performance chart

​This underperformance was even greater in mid-November when the FTSE 100 was trading around its psychological 8,000 mark and was up less than 5% YTD then.

​Pound sterling depreciation to benefit FTSE 100

​Going forward, the 6.5% fall in the British pound sterling versus the US dollar and 3.5% depreciation versus China’s renminbi and the euro over the past few months should benefit the FTSE 100. This is because most of the index’s constituents are global companies which earn most of their money outside of the UK.

​A weaker pound sterling makes UK exports cheaper while FTSE 100 companies’ products and services sold in other currencies than the pound sterling abroad add to the blue chips’ bottom line.

​The US market remains the FTSE 100’s main battle ground as China, the world’s second-biggest economy, is not providing much by way of additional economic impetus at present, while its third biggest trading partner, Japan, is raising interest rates and not cutting them. The fourth biggest market is Germany but the country has seen four negative quarters of gross domestic product (GDP) growth in the past seven.

​FTSE 100 fundamental outlook: dividends and share buy backs

​The FTSE 100's dividend outlook remains stable, with analysts projecting £78.6 billion in payments for 2024, representing a modest 1% year-on-year (YoY) increase.

​These projections indicate a further 7% growth to £83.9 billion in 2025, though still falling short of the index's all-time high of £85.2 billion set in 2018.

​According to an AJ Bell’s latest (October) report, the projected dividend yield stands at 3.7% for 2024 and 4.0% for 2025, based on ordinary dividend payments alone.

​FTSE 100 companies have already announced £49.9 billion in share dealing buyback programmes for 2024, following £52 billion in 2023. This represents significant shareholder returns beyond traditional dividends.

​Furthermore the scale of buyback activity suggests corporate confidence in valuations and future prospects. This trend has supported share investing opportunities, especially when bargain hunters recently stepped in around the psychological 8,000 mark.

​9,000: a feasible target for the FTSE 100?

​Since the FTSE 100 tends to sideways trade for several months before finding a new, higher equilibrium, we expect to see a similar step change in 2025. Just like the 2023 ascending triangle was eventually broken through in early 2024 and led to this year’s gains we expect a similarly potentially bullish continuation triangle to propel the FTSE 100 higher in 2025.

​For such a bullish move to occur, a rise not just above the May-to-November downtrend line at 8,376 but also above the July-to-October highs at 8,395-to-8,414 would need to take place. In this case a bullish triangle breakout and rise above key technical resistance on the weekly chart would most likely take the FTSE 100 to a new record high. Given the near 600 point width of the potential triangle formation, the psychological 9,000 mark represents a possible upside target for the FTSE 100 in 2025.

​FTSE 100 weekly chart

​Only a bearish reversal, fall through and weekly chart close below the August low at 7,916 would void the long-term uptrend.

​On the daily chart last week’s 2.5% surge higher bodes well for the bulls with the 8,400 region being back in sight.

​Potential slips are expected to find support between the 55- and 200-day simple moving averages (SMAs) at 8,224-to-8,129 since the September-to-early October lows can also be found within this area.

​FTSE 100 daily chart

​A possible year-end forecast may be the 8,400 level but were it to be exceeded, it is likely that a new record high above the 8,474 May peak may be made in light volume towards the end of the year.