- FTSE price in freefall with fifth consecutive negative session
- Turmoil in Afghanistan and rising Covid19 cases spooking investors
- Markets all over the world experiencing sharp drops as the international situation continues to cause concern
The FTSE price continued to tumble in Friday’s session with another 0.5% drop to the 7044 level. This is almost 2% down from Monday’s opening price of 7228 and continues to demonstrate the huge level of uncertainty facing investors at the moment. The situation is being mirrored across all markets.
And while the international situation continues to deteriorate, the continued rise of Covid19 cases and deaths in the UK as the economy re-opens is also an additional headache for investors. The situation is also deteriorating rapidly in other markets with British influence such as in Australia and New Zealand where the Delta variant seems to be running riot.
With five consecutive negative days, the FTSE price is now firmly in bearish territory. As the fallout from the international situation especially the Afghanistan fracas continues to bite, this bearish scenario should continue to play out, at least for some time.
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Short Term Prediction For FTSE Price: More Bearish Worries As International Turmoil Prevails
A bearish period is expected to continue with all stock markets for the foreseeable future. With a perfect storm of Covid19 concerns and the Afghanistan situation, investors are holding back. In fact, the FTSE price has lost almost 2% of its value from last weeks’ close of 7231.
Inflation worries are also gripping the FTSE index with this expected to continue increasing, always according to the Bank of England forecast. Re-opening of the economy continues to be sluggish and although there were good GDP results, the weeks ahead appear to hold some hesitancy as cases continue rising.
If the bearish scenario continues to persist, the FTSE price may expect to start dropping with the psychologically significant value of 7000 the first to cede. This could be precipitated by a sell-off with the 6800 mark being the next level of strong support. This price drop would mean that all the gains made since July 20 would be erased.
If a bullish scenario were to prevail, the price would once again regain the 7100 level and continue to the next level of resistance at 7150. However, this scenario is highly unlikely at this point.
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Long Term Prediction For FTSE Index: Bearish Period Expected To Dissipate After A While But Bullish Overall
Although the current situation for the FTSE price appears quite dire, this does not mean that the long term will not be rosy. As the situation stabilizes on the international front, investors should begin to regain confidence.
The bullish predictions for the FTSE price should prevail by the end of the year although the usual pitfalls remain. Much also depends on keeping inflation in check and the panning out of the Covid19 situation.
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Gerald Fenech
