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The UK Index is pushing highs of the day, again, trying to overcome 3-week resistance and holding onto yesterday’s late gains manufactured by Sterling weakness, itself a function of Westminster turmoil, which has thankfully since calmed, along with further easing of trade fears. Higher oil prices are providing much needed support to Energy, though USD strength is hindering Metals and their miners and off-setting the now almost-ignored traditional benefit of solid overnight China inflation data. Note defensives both helping and hindering the index this morning, suggesting a lack of conviction in terms of risk appetite.
Contributors: UK Index +16pts, thanks to positive contributions from BP/RDSB (breakouts, oil prices up), GSK/DGE (defensive, momentum), SKY (Fox set to increase bid), SHP (Takeda takeover approved by US), RB (defensive), AZN (rebound), EXPN (breakout). The biggest drag today derive from profit taking in several names that have bounced including BATS, VOD, GLEN, BT, NG as well as RIO (USD up, metal prices down) and TSCO (UK & ROI CEO steps down).
Technicals: The UK 100 is trying to extend its 130pt rebound from Friday’s lows, now eyeing up June highs which sit 80pts north.
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The UK 100 is trying to extend its 130pt rebound from Friday’s lows, now eyeing up June highs which sit 80pts north.
Watch levels: Bullish 7720, Bearish 7690
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