Invezz.com - The FTSE 100 index continued its bullish momentum this week as it hovered near its all-time of £8,775. It has soared by about 14% in the last 12 months and 6.50% this year. It is still lagging behind popular European indices like the DAX and CAC 40 indices. Let’s explore some of the top FTSE 100 shares to watch next week.
Bank of England decision
The FTSE 100 index rallied after the Bank of England delivered its first interest rate decision of the year. Unlike the Federal Reserve, the bank slashed rates by 0.25% and hinted that it would maintain a dovish tone in the coming meetings.
The bank is cutting rates because UK’s inflation has moved near its 2% target, while the economy has slowed substantially. Foreign Direct Investment to the UK has fallen, while the manufacturing sector has remained on edge.
Therefore, the BoE hopes that rate cuts will boost the economy by making it easier for people and companies to borrow cash.
Interest rates have started to move downward in the past few months. The 10-year yield has dropped from 4.91% in January to below 4.50%. Similarly, the five-year yield has moved from 4.62% to 4.2%.
Top FTSE 100 shares to watch
There will be some big FTSE 100 companies in the spotlight next week as they release their financial results.
Barratt Redrow (LON:RDW) will be the first major FTSE 100 stock to watch as it publishes its interim results for the period. This is a notable company formed by Barratt’s £2.3 billion acquisition of Redrow in 2024. The results will provide more color about the state of the housing market in the UK.
Barclays (LON:BARC), one of the biggest British banks, will release its final results for 2024 on Thursday. These numbers come at a time when the Barclays share price is firing on all cylinders. It has risen in the last five consecutive months and is now trading at the highest level since November 2007.
Barclays stock is up by almost 400% from its lowest level in 2020. This growth is because of the ongoing health of its consumer banking division and the potential recovery of its investment banking division.
British American Tobacco (LON:BATS) is the other top FTSE 100 stock to watch as it publishes its financial results on Thursday. Like Barclays, the BAT stock price has soared to 3,330p, and is sitting at its all-time high. This performance is in line with that of other tobacco stocks.
Consumer goods companies like Coca-Cola (NYSE:KO) and Unilever (LON:ULVR) and banking giant Standard Chartered (LON:STAN) will be the other top FTSE 100 firms to watch next week. The other top global companies to watch will be McDonald’s, Shopify, Applied Materials (NASDAQ:AMAT), and Cisco (NASDAQ:CSCO). While these are American companies, they have an impact on their global counterparts.
FTSE 100 index analysis
FTSE index chart by TradingView
The weekly chart shows that the FTSE 100 index has been in a strong bull run in the past few months. It recently crossed the important resistance level at £8,475, its highest level in May last year. This price was also the upper side of the ascending triangle pattern.
The FTSE 100 index has also remained above the 50-week moving average. Also, the Average Directional Index (ADX) has pointed upwards, a sign that the trend is strong. Therefore, the FTSE 100 index will likely continue rising as bulls target the next key resistance level at £9,000.
A drop below the crucial support at £8,476 will invalidate the bullish view and point to more downside in the near term.