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The UK 100 has extended Friday’s reversal and sell-off, starting this new week much like it did the previous. The result is an evaporation of most of last week’s rebound from April lows support, the driver being a mix of things, including political difficulties for Chancellor Merkel on migration and PM May on Brexit, coupled with mixed PMI reads from China and Europe and, of course, continued worries about the threat of a US-inspired global trade war. No help from weaker GBP.
Contributors: UK Index -70pts, driven lower by heavyweights such as HSBC (China exposure, trade war worries), Miners (China PMIs, stronger USD, trade war fears), AZN/GSK/DGE (profit-taking after bounce), RDSB/BP (stronger USD, oil lower), Banks (risk-off, profit taking after bounce). Limited assistance from MCRO (selling unit for $2.5bn), RB (defensive) and OCDO (TSCO deal with Carrefour).
Technicals: The UK 100 has bounced off 7540 but is struggling to get back above 7575.
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The UK 100 has bounced off 7540 but is struggling to get back above 7575.
Watch levels: Bullish 7575, Bearish 7540
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