Around 1.5% drop for FTSE 100 as banking sector lags due to persistent headwinds

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FTSE 100 slides 1.57% to 10,498

Highlights

Shell PLC lifted second-quarter gas output guidance, supporting energy stocks amid otherwise weak FTSE 100 sector performance.
Lloyds Banking Group lagged peers, revealing persistent headwinds for UK banks while 3i Group prepared for its July 24 dividend payout.
FTSE 100 trades below key moving averages with negative momentum; near-term range projected at 10,428–10,567 as downside risk dominates.

Shell guidance lifts energy sentiment but broad declines persist

Shell PLC raised its second-quarter gas output guidance, shifting expectations for the energy sector within the FTSE 100 and providing modest support to energy stocks. Experian stood out as the top-performing blue-chip for the session, offering isolated strength though not enough to offset broader market weakness. Lloyds Banking Group underperformed relative to its peers, reflecting persistent headwinds in the banking space, while 3i Group maintained focus on its final dividend distribution planned for July 24 — though price action has remained under broader selling pressure.

Sell signals strengthen as FTSE 100 tests multilevel support

On the hourly chart, UKX is trading below both the MA-20 at 10,623 and the MA-50 at 10,605, with the daily MA-200 providing underlying support at the 10,100 level. The immediate resistance is identified at the Ichimoku Kijun level of 10,614, while support lies at 10,428. Momentum readings show the Moving Average Convergence Divergence (MACD) in a sell configuration, and the Average Directional Index (ADX) signals a neutral trend. The Commodity Channel Index (CCI), Relative Strength Index (RSI), and Stochastic RSI all point to oversold and prevailing sell conditions, with Bull/Bear Power (BBP) indicating continued seller dominance. The Awesome Oscillator remains neutral, and no significant divergence is noted between price action and momentum oscillators.

Downside risk prevails as volatility narrows FTSE trading range

Over the next two to three trading days, the FTSE 100 is expected to move within a band between 10,428 and 10,567, consistent with recent volatility. The probability of an upward move is assessed at less than 20%, while a downward move is viewed as highly likely, at above 80%. The baseline scenario anticipates continued consolidation within this corridor. A decisive breakout above resistance at 10,614 could trigger bullish momentum, whereas a move below 10,428 would open the way for further downside.

Viktoras Karapetjanc, expert at Traders Union, believes the FTSE 100 remains fundamentally resilient despite prevailing short-term weakness. He sees positive signals from Shell’s upgraded guidance, but notes broad market sentiment is still cautious as key financials and other sectors struggle. The upcoming 3i Group dividend may attract investors, though overall price action suggests further consolidation. In Karapetjanc’s words: “As long as support levels hold, I remain optimistic that improving sector fundamentals can spark a medium-term turnaround.”

Previously it was reported that geopolitical tensions and sector divergence weighed on UK equities with energy stocks offering rare outperformance amid broader market declines. Fresh technical signals now reinforce expectations of continued downside risk for the FTSE 100, making the 10,428 support level a critical threshold to monitor for potential further losses.

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.