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The UK Index is higher, but off its highs, after UK GDP confirmed slower economic growth in Q1. Oil may continue to rise, helped by a weaker USD, but a stronger GBP is hampering UK Index heavyweight Energy. On the flip-side, a weaker USD and slightly less China concerns are helping metal prices and thus Miners. Banks not really helping today, suggesting that this is not really a risk-on mood, with many defensives helping to drive the index north.
Contributors: UK Index +50pts; driven by GSK/AZN (rebounds, sector M&A), HSBA (bounce, Fed’s stress test, China stimulus), Miners (weaker USD, Copper off lows), BATS (breakout, defensive), RR/ULVR (momentum), SHP (Takeda shares higher) and RR (BAE read-across). Offering the only real resistance is BP (profit taking, stronger GBP) and CCL (bounce reversing).
Technicals: The UK 100 has pulled back from an attempt to break above 7700, but its 1-week rising channel remains intact.
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The UK 100 has pulled back from an attempt to break above 7700, but its 1-week rising channel remains intact.
Watch levels: Bullish 7706, Bearish 7657
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