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The UK 100 is back below 7600, back from 7650 highs as traders digest, 1) the US following through on its threat to impose the first in a potential series of trade tariffs, and, 2) China following through with its pledge to retaliate. An element of risk-off into the weekend, albeit limited, as we’ve been prepped for this for weeks, if not months. Having started with tariffs on $34bn of Chinese goods, the question now is how far Trump scales it up towards the $500bn figure he has been throwing around and what the fallout is as he tries to punish China to prove himself a US protectionist.
Contributors: UK Index -10pts, with the biggest drag derived from the likes of HSBC (heavyweight, China exposure), BP/RDSB (oil prices lower) and Miners (China exposure, Copper prices lower). Helping keep the index remain close to breakeven is buoyancy from BATS/DEG (heavyweights, defensives), RB (defensive, breakout, momentum), ITV (broker upgrade) and VOD (heavyweight, rebound).
Technicals: The UK 100 is back below 7600, but still in a 7580-7650 rising channel.
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The UK 100 is back below 7600, but still in a 7580-7650 rising channel.
Watch levels: Bullish 7610, Bearish 7570
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