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The UK Index is back to flat at 7625, as a stronger USD (strengthened up by hawkish comments from the Fed Chair Powell) hinders heavyweight Energy & Resources stocks. With oil already on the back-foot due to the imminent tapering of production cuts by OPEC & allies (the only question being how much), markets await imminent BoE interest rate decision for direction. For the moment, GBP weakness is helping to protect the Index from further losses, however, a more hawkish BoE statement could give GBP a boost, sending UK Index even lower.
Contributors: UK Index flat, in a tug of war, with the likes of BATS/ULVR/DGE/AZN (defensives, weaker GBP), Shire (Takeda +4.5% on UBS upgrade), SKY (M&A; higher bid coming?) and RIO (weaker GBP) pulling positively, whilst HSBC (China exposure), RDSB (lower oil prices), MRO (reversal, profit-taking), BARC (risk-off) and UU (Ex-div) pull negatively.
Technicals: The UK 100 broke below week-long rising support, but holds above Tuesday’s 7618 lows.
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The UK 100 broke below week-long rising support, but holds above Tuesday’s 7618 lows.
Watch levels: Bullish 7640, Bearish 7620
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