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The UK Index has made a poor start to the week, extending Friday’s decline from rebound highs. This comes from oil weakening on the prospect of higher OPEC output, as well as a trade war concerns hotting up again. Trump has threatened EU cars and now Chinese investment in US hi-tech, while China and Europe have understandably threatened retaliation. As we said last week, so long as these soundbites continue, market sentiment will rise and fall. Where it all ends, nobody knows.
Contributors: UK Index -95pts dragged lower mostly by HSBA (heavyweight, Asia exposure), BP/RDSB (lower oil prices), GLEN/RIO/BHP/AAL (trade fears, lower metals), BATS (profits taking after breakout), PRU/GSK/DGE (breakdown) and LLOY/BARC/RBS (trade fears, risk-off). Minimal positivity from SHP (Takeda share higher), AZN (bounce) and ULVR/NMC/ABF (defensive, momentum).
Technicals: The UK 100 has retraced 75% of Friday’s 150pt rebound, sitting just 40pts above June lows.
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The UK 100 has retraced 75% of Friday’s 150pt rebound, sitting just 40pts above June lows.
Watch levels: Bullish 7595, Bearish 7575
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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Prepared by Michael van Dulken, Head of Research