Global risk sentiment started strong last week, lifting the FTSE 100 as upbeat earnings out of the US from Microsoft and Amazon helped fuel optimism. But margin pressure at Alphabet and Meta triggered a tech-led setback, dragging global equities lower into the weekend.

In the UK, energy and financials anchored the FTSE 100’s climb to a record 9,798 on Wednesday. Shell helped by firm oil prices, reinforcing its 7.16% index weight, while financials held steady thanks to solid earnings and macro stability. Together, they kept the rally alive even as global sentiment wavered somewhat.  

This all helped the FTSE 100 climb 1.6% off Monday’s low at 9,640, posting a new record high of 9,798 on Wednesday. Energy and financials led the advance, but momentum faded into the weekend, with the index settling at 9,741, marking a modest pullback visible on the 4-hour chart below.

Maintaining the momentum of this recent up move continues to be important.

After last week’s late pullback, all eyes are on whether the FTSE 100 can reignite upside momentum and make a run at the psychological 10,000 mark. The index hit a record 9,798 midweek before fading to 9,741 into Friday’s close. This week’s focus shifts to heavyweight Q3 earnings: BP (2.73% weighting) on Tuesday and AstraZeneca (7.1%) on Thursday, which is the UK’s biggest company by market capitalisation. Strong results could resume the rally, especially with energy and healthcare also acting as key stabilisers.

All eyes now turn to Thursday’s Bank of England decision, with the MPC set to announce rates at mid-day with the press conference at 12.30pm. Markets are split, some expect a 25bp cut to 3.75%, while others see a hold at 4.00% amid persistent inflation risks. The outcome could be pivotal for FTSE 100 momentum, especially with the earnings from BP and AstraZeneca also in play. A dovish surprise may fuel a push toward 10,000, while a hold could stall the rally.

Goldman Sachs surprised markets last week by forecasting a 25bp rate cut, citing softer inflation and cooling wage growth. But others expect the Bank of England to hold at 4.00%, stating the MPC might prefer to wait for more data and the November 25th Autumn Budget before easing.

Market pricing reflects the split view, with only a modest chance of a cut priced in ahead of Thursday’s decision. The outcome could be important for FTSE 100 index momentum and rate-sensitive sectors.  

Technical update - FTSE 100 daily chart:

The FTSE 100 appears to continue to trade with a positive bias, holding above the rising Bollinger mid-average on the daily chart. That mid-average, now at 9,560, marks a key support zone if prices pullback next week. As long as price action stays above it, the broader uptrend remains intact.

A break and close above last week’s 9,798 high would suggest renewed upside momentum, which could open the door to 9,877, the 100% Fibonacci extension of the October 7th to 17th price pullback, and potentially 9,991, the 138.2% extension, just shy of the psychological 10,000 mark.  

Support: 9560 (Bollinger mid-average), then 9538 (50% mid-point) then 9476 (61.8% Fibonacci retracement)

Resistance: 9798 (October 29th high), then 9877 (100% Fibonacci extension) then 9991 (138% extension).

Earnings of some popular FTSE 100 stocks are due out next week and could impact sentiment.

Highlights:

- BP which carries a 2.73% weighting in the FTSE 100 is due to release its earnings on Tuesday.

- AstraZeneca, the largest UK company by market cap and carries the highest index weighting, is due to release its earnings on Thursday.