FTSE 100 analysis: February’s winners and losers
It’s been a challenging time for global markets. Having endured the Covid-19 pandemic for two years, they’re now facing the fall-out from Russia’s invasion of Ukraine.
But what has this war meant for the FTSE 100? How has the blue-chip index of the 100 largest companies listed on the London Stock Exchange (LSE) reacted?
In this analysis we highlight the biggest winners and losers on the blue-chip index over the past month and consider what level it may reach this year.
FTSE 100 market overview: The importance of the index
The FTSE 100 index, which was launched in 1984, features the 100 largest companies listed on the LSE, ranked in order of their market capitalisations.
The index, often referred to as ‘the Footsie’, is seen as a barometer of UK investing health, even though many of the companies on the index are global businesses.
The FTSE 100 performance is reviewed four times-a-year – March, June, September and December – to ensure those with the highest market caps are included.
FTSE analysis: Major price drivers and technical view
How has the FTSE 100 performed over the last month? Despite ongoing concerns about Covid-19 and the conflict between Russia and Ukraine, the index has fallen relatively modestly during February.
The index is down 52.64 points, 0.7%, to 7,411.65 points since the start of the month, according to an analysis of data to midday on 28 February 2022.
The FTSE 100 index year-to-date figures are only marginally worse, with a fall of 1.07%. However, over longer time frames, it is showing some increases.
For example, the FTSE is up 4% over the past six months and 12.4% ahead of the 6,558.50 points level it stood at a year ago.
It’s also around 48% higher than it was in mid-March 2020 after slipping below 5,000 points due to coronavirus lockdowns.
The FTSE 100 technical analysis, as of 1 March 2022, showed neutral sentiment for the index. The relative strength index (RSI) has remained neutral at 49, while the moving average convergence divergence (MACD), which gave a ‘sell’ signal, stood at -13.
The index has been trading above the 200-day simple moving average of 7,220, which could serve as a potential support level to watch while identifying the FTSE 100 trend.
FTSE top five biggest risers and fallers in February 2022
The FTSE 100 performance analysis of the past month (as of 28 February) reveals that 35 companies have seen their stock prices increase.
Among the best performers, two companies – Informa and Glencore – have enjoyed double digit returns, with the rest of the increases being more modest.
At the other end of the scale, 10 companies have suffered double digit share price falls since the beginning of February. The biggest falls have been linked to the Russia-Ukraine crisis.
Ftse 100 outlook: Top five risers
Informa: +11.39%
Informa, the British publishing business, is involved in intelligence, events and research. It recently announced an agreement to sell its medical data business, Pharma Intelligence, to US private equity group Warburg Pincus for £1.9bn. It also outlined the start of a share buyback programme.
Glencore: +10.04%
The Anglo-Swiss multinational is a globally diversified natural resource company. Glencore has been performing well, according to Keith Bowman, senior investment analyst at interactive investor.
Pearson: +9.97%
The British publishing and education company Pearson recently announced that 2021 was a year of strong progress with better-than-expected financial performance. It also reiterated that it was confident of further group revenue growth, with profit in line with current market expectations.
Anglo American: +9.45%
Global mining giant Anglo American recorded $20.6bn underlying EBITDA for the year ended 31 December, 2021. It noted how the company recorded “strong demand and prices” for many products as economies recouped lost ground, spurred by government stimulus.
SSE: +8.73%
Integrated energy group SSE has regulated electricity networks and renewable energy assets, along with complementary businesses. Its third quarter trading statement announced upgraded full-year adjusted earnings per share expectations for 2021/22 to at least 90p from 83p. The company said this reflected the “strength and stability” provided by its mix of businesses.
Ftse 100 outlook: Five biggest fallers
The two biggest fallers in the FTSE 100 over the past month – EVRAZ and Polymetal International – have endured drops for similar reasons, according to Keith Bowman at interactive investor.
“Polymetal International and Roman Abramovich-backed steel producer EVRAZ have both suffered significant share price falls over the month as investors have attempted to calculate the potential economic hit from sanctions against Russia,” he told Capital.com.
EVRAZ -58.60%
Steel manufacturing and mining company EVRAZ, whose significant shareholders include Chelsea FC supremo Roman Abramovich, saw its shares fall significantly. The company has seen its stock price plunge 42% from 250p to 146.59p in the week to 28 February 2022 as the market considered the impact of Western sanctions on Russia.
Polymetal International -30.93%
Anglo-Russian precious metals mining company Polymetal International has also suffered badly from the Russian-Ukraine conflict.
In a statement, the company noted the “rapid deterioration” in the situation had increased the possibility of additional sanctions being imposed.
JD Sports Fashion -18.34%
British sports-fashion retailer JD Sports Fashion was fined £4.3m by the Competition and Markets Authority for failing to comply with aspects of an order issued as part of a review of its FootAsylum acquisition. The shares have also been hit by a wider sector malaise – but that is unfair, according to Jonathan Pritchard, an analyst at Peel Hunt.
Hargreaves Lansdown -15.59
British financial services company Hargreaves Lansdown, which sells its products and services to UK-based retail investors, reported a fall in profits for the first half of the year. It plans to strengthen its digital proposition and expand the services offered, noted Stuart Duncan, an analyst at Peel Hunt.
Abrdn -13.32%
The financial services group, which recently rebranded from Standard Life Aberdeen, provides a range of investment solutions, investments, and savings products. At the end of last year, it announced plans to buy investment platform interactive investor for £1.49bn. However, the shares have fallen since the deal was announced.
FTSE 100 predictions: Where will the index go next?
The FTSE 100 has had a decent few weeks, despite the global problems, according to Danni Hewson, financial analyst at AJ Bell.
Hewson credited the global nature of the index:
However, Chris Beauchamp, chief market analyst at IG Group, predicted a more difficult period ahead of the FTSE 100.
He also believes there could be longer term ramifications.
Making an accurate FTSE 100 forecast is challenging due to the sheer number of companies on the index, each with their own positives and negatives.
The prospects for individual stocks, global sector issues, FTSE 100 news and a wide range of economic factors will influence returns in the short term, as well as over longer periods.
According to predictions by Longforecast.com (as of 1 March 2022), the FTSE 100 could rise 6.5% from 7,411.65 points to 7,892 points over the six months to August 2022.
It could then climb to 8,564 points by February 2023 and reach 8,303 points by February 2024 – an increase of 18.7% over the current level.
When looking for the FTSE 100 forecast, it’s important to bear in mind that analysts’ predictions can be wrong. Projections are based on making a fundamental and technical study of the index’s performance. Past performance is no guarantee of future results.
It’s important to do your own research and always remember that your decision to trade depends on your attitude to risk, your expertise in the market, the spread of your investment portfolio and how comfortable you feel about losing money. You should never invest more than you can afford to lose.
FAQs
Why has the FTSE 100 been dropping?
The FTSE 100 index is modestly down this year by around 1% since the start of this year. This can largely be attributed to the Russia-Ukraine conflict.
Which FTSE 100 shares have fallen the most?
Mining shares with links to Russia have been the heaviest fallers during February, with the market weighing up the impact of sanctions being imposed by Western countries.
Which FTSE 100 stocks have risen the most?
Companies in various sectors, including information and mining, have been among the best performers over the past month. Those leading the way (as of 28 February), including Informa, Glencore and Pearson, have stock-specific reasons, such as deal announcements and share buybacks.
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