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The UK Index has re-gained lost ground to trade positive. While continued gains for oil post-OPEC are helping Energy it is not the main driver as it has been of late. More help is at hand from bargain hunting in the Banks following recent declines, as well as defensives welcoming fresh GBP weakness derived from EUR strength. Sterling is perhaps pricing in another difficult meeting for PM May with EU counterparts, where she will be pushed for progress on Brexit negotiations.
Contributors: UK Index +5pts with positive contributions from SHP (defeat of Takeda shareholders against takeover), DGE/IMB (weak GBP), BATS (weak GBP; ignoring 1.3% ex-div) and Banks (bounce back after trade war inspired declines), just about overpowering the negative drag from PRU (still in risk-off mode), GLEN (metals still weak), ABF (H&M read-across to Primark), AZN (heavyweight, small declines) and CRH (stronger EUR; US exposure).
Technicals: The UK 100 is in an uptrend from June’s 2-month lows, but has found resistance by way of falling highs since 24 June.
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The UK 100 is in an uptrend from June’s 2-month lows, but has found resistance by way of falling highs since 24 June.
Watch levels: Bullish 7635, Bearish 7600
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