- Fresh concerns about global trade relations were weighing on European markets on Thursday and sent the UK’s FTSE 100 index 0.4% lower.
- Brexit saga lingers on as a main focus and concerns of the domestic housing market hurt builders.
- Sterling continues to march on, denting advances in the multinationals.
The FTSE 100 gave up almost 28 points or 0.4% to 6,834.92. Worries about the domestic housing market and a late rally for the pound, but solid updates from the likes of Primark owner AB Foods and Sage Group helped to minimise losses. The pound was up 0.6% against the dollar to approach the 1.3 mark for the first time since mid-November and up 0.6% versus the euro at 1.1371. Housebuilding shares were pretty much all in the red due to a poor survey from the Royal Institution of Chartered Surveyors. The report showed that the outlook for the housing market over the next three months was the worst on record in December due to Brexit uncertainty. Meanwhile, Theresa May will now work on her Brexit ‘Plan B’. She has until just the 21 January to put it forward.
Elsewhere, trade war fears were weighing on the index due to reports that the US is investigating Chinese tech giant Huawei for stealing trade secrets from US business partners. However, recent noise which has lifted risk appetite in the US markets have stated that Treasury Sec. Mnuchin is in favour of lifting the tariffs, while trade representative Lighthizer is not.
Corporate news
In corporate news, ITV was the biggest faller today. The giant was hit by a downgrade to ‘underperform’ at Bank of America Merill Lynch, while EasyJet flew lower as Barclays slashed its price target and downgraded to ‘underperform’. The oil giants were providing a drag while miners were mixed. Banks were mostly lower.
Best and worst
The best three of the pack were Associated British Foods (ABF) 2,330.00p 6.98%, followed by Sage Group (SGE) 625.00p 5.40% and finally GVC Holdings (GVC) 687.00p 2.08%. the worst three of the bunch were ITV (ITV) 129.10p -5.94%, then Wood Group (John) (WG.) 541.20p -4.65% and finally SSE (SSE) 1,126.00p -3.31%.
FTSE levels
The index retains a bearish bias and technicals lean negative. The FTSE 100 remains below the key 38.2% Fibo retracement target of the May 2018 decline, located at 7041 and is on a knife edge on the 23.6% Fibo at 6839 having pierced below there today. Bulls need to get back above the 38.2% fibo for a run to the 50% Fibo of the same range that is then located at 0.7204. Daily MACD stays negative while RSI drifts lower away from the significant 70 level. S1 guards S2 located at 6798 guards the 21-D SMA at 6778
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