There’s been more upside seen in UK stocks this morning, with the FTSE 100 coming close to moving back above the 7000 handle with the market reacting favourably to the latest Fed decision. The US central bank announced Wednesday evening that it would be “patient” regarding future interest rate hikes and also stated that there was some readiness amongst policymakers to adjust the balance sheet run-off in light of economic and financial developments, in what was an all-round dovish update. The remarks were warmly greeted by investors on Wall Street, with the Dow Jones Industrial Average moving back above the 25000 mark and hitting a 7-week high as the event has clearly raised sentiment and provided a boost to UK stocks here in London this morning.
BT Shares drop despite beating forecasts
One of the worst performing blue-chips today is BT, with shares in the telecoms firm declining by over 3% and residing near the foot of the FTSE leaderboard. Both the top and bottom line were slightly better than many had forecast, but they still both declined with a 3% drop in core earnings year-on-year one the main negatives. Arguably the brightest note came from the rise in BT’s consumer unit, which recorded a 15% increase in core profits to £648m while revenue came in at £2.78B - a 4% gain. Outgoing CEO Gavin Patterson was upbeat in his future outlook for the firm claiming that despite the declines, BT is on track to post underlying profits near the top end of its guidance for the current financial year of around £7.4B.
On balance it seems that the latest update shows some signs that the turnaround strategy is beginning to work, but there remains much to be done and the stock continues to languish not far from 6-year lows. From a technical perspective today’s drop has seen price move back below the 200 day SMA, which is a worrying development after the market spent much of the past quarter above this level. The drop below could be seen to indicate that price is once more returning to a downtrend with the market spending the vast majority of recent years below the 200 SMA as it experienced a sizable decline.
BT shares have dropped back below the 200 day SMA today and the market could be seen to remain in a longer term downtrend, with the declines seen in the past few years broadly characterised by price remaining below this trend identifier. Source: xStation