FTSE 100 futures market heading for calmer waters this weekend

There is a sense of stability returning to the FTSE 100 index if today’s market is anything to go by. Despite a long and volatile week, which saw the FTSE 100 swing from highs of 5831 to lows of 5641, there is a sense that the index could find its feet again during the weekend markets.

Technical analysis: FTSE 100 bouncing back from drug trial disappointment

During early trading on Friday morning, the FTSE index fell from 5826 to 5733 in the space of 80 minutes. Traders were understandably pricing in the disappointment of Gilead Sciences’ failed clinical trial in its quest to develop an antiviral drug to combat the coronavirus.

Despite a fear that the index would pare gains over the last couple of days, the FTSE 100 rallied in the middle of the day before closing at 5750, still 109 points up on the close of Tuesday trading when the index was trading at 5641.

According to Russ Mould, investment director at AJ Bell, a stable FTSE 100 ‘could be viewed as a good sign’.

‘A moment of calm is welcome as investors try to get their heads round the potential hit to corporate earnings and a better picture of when the world could recover from the pandemic,' added Mould.

Housebuilders and car manufacturers plotting return to work

In terms of positive signs of economic recovery from the pandemic, some of the UK’s leading housebuilders and car manufacturers are pencilling in dates to reopen some of their sites.

The likes of Aston Martin and Jaguar Land Rover have mooted plans to kick-start production in May. Meanwhile one of the UK’s leading housebuilders, Taylor Wimpey, is due to reopen a selection of its building sites from 4 May.

Although Taylor Wimpey’s chief executive Pete Redfern described the move a ‘gradual restart rather than a big bang’, it’s still a positive sign to see some of the UK’s biggest corporations returning to around 80% of normal activity levels by June.

No big moves likely given the string of Q1 results due next week

Positivity in the FTSE 100 futures markets this weekend is likely to be tempered by the prospect of a string of FTSE 100 firms publishing their first quarter results next week. Travis Perkins, BP, GlaxoSmithKline and Next are all scheduled to report to shareholders.

It will give investors a first glance at how the UK’s leading corporations are faring in the lockdown and whether any cost-saving measures have managed to mitigate some of the damage.

With most outlooks almost certain to be negative in the short-to-medium term, these looming reports will likely curb any chance of big moves north for the FTSE 100 over the weekend.

What is weekend trading?

It’s possible to trade forex and indices like the FTSE 100 during Saturday and Sunday with IG. Our world-leading trading platform is the only solution to offer weekend trading on indices. Using CFDs, you can be agile within our weekend markets. Whether it’s breaking news about the coronavirus pandemic – or central bank measures to ease the strain on global markets – you don’t have to wait until the markets open on Monday to trade.

The weekend prices for indices and forex are quoted separately to their weekday counterparts, based on our view of the prospects for that market given client business and news flow. As a result, you can use these markets to hedge against risk on your weekday positions.

How much does it cost to buy UK shares with IG?

There are three ways to ‘buy’ UK shares with IG: spread betting, trading CFDs or buying physical shares. The cost will depend on which method you choose. The table below illustrates how the costs to get exposure to £10,000 of Lloyds stock, which is equivalent to 16,000 shares (quoted at 62.5p a share).

Remember, spread bets and CFDs are derivatives, which come with higher risk and reward than investing.

Cost to get exposure to Lloyds stock

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Note: Amounts do not include overnight funding charges and taxes. Spread bets are not subject to tax. CFDs are free from stamp duty, but subject to capital gains tax. Share dealing is subject to both stamp duty and capital gains tax.