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The UK’s UK Index index remains under water, off its overnight lows, but also back from a failed attempt to break back above 7400. Sentiment dented by US weakness derived from continued worries about higher US bond yields, and thus borrowing costs, coupled with some heavyweight corporate disappointments (e.g. Alphabet, 3M, CAT, Coke), fuelling fears than earnings growth may soon peak. This is understandably dragging on the UK Index ‘s global growth sensitive stocks, albeit in tandem with some M&A excitement (SHP, SKY, WTB).
Contributors: UK Index -45pts dragged down by RDSb/BP (profit taking from technical resistance, oil off highs after API build), Miners (ANTO Q1 production disappointed) and Banks (LLOY Q1 profits miss, more PPI). Positive contributions from BATS/IMB (BATS’ upbeat AGM Statement), SKY (Comcast bid), CRH (€1bn share buyback) and ULVR.
Technicals: The UK 100 holds below 7400, off its recent 2.5 month highs. However, 1-month rising support remains valid around overnight lows of 7350, which could help the index with a rebound should another bout of weakness arise.
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The UK 100 holds below 7400, off its recent 2.5 month highs. However, 1-month rising support remains valid around overnight lows of 7350, which could hep the index with a rebound should another bout of weakness arise.
Watch levels: Bullish 7405, Bearish 7350
Solid Green line
Possible support
Solid Red line
Possible resistance
Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.
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