£70 billion utility investment boosts FTSE 100 above 10,467.65

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FTSE 100 jumps 1.59% to 10467.65

Highlights

National Grid's planned 70 billion investment over five years signals strong capital commitment and sector growth in UK utilities.
An 8% rise in National Grid’s expected earnings per share for 2025/26 underpins robust FTSE 100 performance despite minor UK GDP contraction.
Technical outlook remains bullish with prices near daily highs; projected range of 10,387.21 to 10,530.64 points and a 77% probability of continuation higher, but overbought conditions warrant near-term caution.

Sector investment and earnings lift sentiment despite GDP contraction

National Grid's announcement of a £70 billion five-year investment plan, together with an 8% increase in earnings per share for fiscal 2025/26, is drawing attention to the robust capital deployment and earnings expansion within the UK utilities sector. This substantial commitment supports a positive outlook for major FTSE 100 constituents, reinforcing sentiment in line with the prevailing index strength. Although Reuters notes a 0.1% decline in UK GDP for April, sector-specific growth appears to be mitigating the broader macroeconomic drag.

Bullish signals hold as overbought conditions temper short-term momentum

On the technical front, price remains above the MA-20 and MA-50 on the hourly chart, as well as above the MA-200 on the daily timeframe. Immediate support is defined by the Ichimoku Kijun level at 10,297.99. Momentum signals are mixed: MACD maintains its buy status, ADX indicates neutral trend strength, RSI signals a buy, while Stoch RSI, CCI, and BBP all indicate overbought conditions—suggesting strong buying but stretched intraday momentum.

Sideways range anticipated as volatility bands contain gains

In the short term, price is expected to fluctuate within the 10,387.21 to 10,530.64 range, which reflects the typical volatility band relative to current levels. There is a 77% probability of further gains and a 23% likelihood of a reversal lower. The base scenario remains for sideways trading within the established range, with a breakout above resistance likely to drive additional momentum, while a move below support could trigger a pullback toward the Ichimoku Kijun level.

Anton Kharitonov, analyst at Traders Union, sees the FTSE 100’s advance as largely driven by strong sector-specific news, particularly from National Grid’s investment plan and earnings growth. He notes that broader economic contraction in April tempers the bullish momentum, while technical signals point to an overbought market with mixed short-term indicators. The base scenario is for rangebound movement unless either resistance or support levels are breached. "Until price confirms a breakout above 10,530.64, I stay cautious and expect choppy sideways trading."

Earlier, analysts noted that renewed optimism in the UK market was counterbalanced by soft macroeconomic data and heightened inflation expectations. The current upward momentum in the FTSE 100, supported by sector-specific investment and earnings growth, suggests investors should monitor for a sustained breakout above the 10,530.64 resistance level as a potential catalyst for further gains.

Source of Data: UKX Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.