Home » London in the transpacific treaty, what the Ftse100 UK index tells us

London in the transpacific treaty, what the Ftse100 UK index tells us

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London in the transpacific treaty, what the Ftse100 UK index tells us

Analysis of the Ftse100 UK index

On 31 March 2023, the member countries of the CPTPP Trans-Pacific Trade Agreement unanimously approved the admission of the United Kingdom as the 12th member, the first European country to join the Agreement. London is historically linked to the Indo-Pacific area and to the CPTPP joining Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam whose economies account for 13.4% of global gross domestic product, therefore making the CPTPP one of the largest free trade areas of the world by GDP, such as the United States-Mexico-Canada Agreement (USMCA, evolution of NAFTA) and the Common European Market (MEC).

London is therefore continuing the policy of widening and improving its global trade links after leaving the European Union, moving towards logistically distant but expanding economies. Exports to CPTPP countries from Britain were worth £60.5 billion (75 billion dollars) until the end of last September. With this deal there will be tariff cuts on cars, liquor and dairy products and analysts’ projections indicate that it would boost the economy by £1.8bn each year, over the long term.

The Great Britain Agreement

Britain is the first new European member to join the group and Prime Minister Rishi Sunak’s office called the biggest trade deal since Brexit. It is estimated that the agreement could add an infinitesimal percentage to the British GDP, but certainly beyond the economic reasons there are strategic reasons to make it interesting.

Let us therefore take stock of the situation regarding the FTSE100 stock index, the most used as an indicator of the UK market. Made up of a basket of the 100 most capitalized companies, it represents around 80% of the market capitalization of the entire London Stock Exchange, and listed companies include Astrazeneca, BP, GlaxoSmithKline, HSBC, Vodafone…

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L’indice Ftse100 Uk

The graph illustrates the trend of the index from 2016 (Brexit) to today. It is noted that the top of 7868pt reached in May 2018 (from which it lost -37% until 2020) held up to the recent new high of 8047pt achieved in February this year (+63% from the minimum peak of 2020) . The turmoil in March affected this index which lost -10% in one month. The presence of the two maximums in the resistance area implies the need to carry out bearish reversals towards the 6800/6500 area (retracements), approaching the short-lived supportive trendline currently in the 6450pt area and very important as rebounds will take place on the hold but, if violated , would activate selling pressure. For the immediate term, the fluctuation can take place in the 7300/7900 band.

This article has been prepared for informational purposes only, it does not constitute advice or a solicitation to buy or sell financial instruments. The information reported is in the public domain, but may be subject to change at any time after publication. We therefore decline all responsibility and remind you that any financial transaction is carried out at your own risk.

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