CHINA SLOWDOWN PULLS DOWN FTSE 100, EU-MAY NEGOTIATIONS UNCERTAIN

FTSE 100 futures are currently trading at 6854-lower by 0.02% as compared to the previous closing. The index futures closed in the negative territory in the previous trading session.

In the cash markets, FTSE 100 was off by 0.28% at the time of writing. Weak economic data from China pushed down markets worldwide which results in FTSE 100 also in negative territory as miners, banks and consumer stocks suffered from investors’ increasing concerns about the world’s second-biggest economy.

The midcap index FTSE 250 was down 0.84% at the time of writing.

The British PM was under pressure again in Brussels as she attempted to request amendments to the already agreed deal between the EU and UK. However, there were no signs that she had successfully managed to sway the leaders at the summit in Belgium.

Banks and miners were among the top losers as the weak data added to persisting worries over slowing growth in China amid its trade dispute with the U.S.

Chinese retail sales for November grew at the weakest pace since 2003 and industrial output rose the least in about three years as domestic demand softened further.

Financial heavyweights in the index such as Lloyd’s, Barclays, and Prudential were down between 0.40% to 1.40% at the time of writing. HSBC which derives a big chunk of profits from Asia, was the biggest single drag on the FTSE 100.

Mining shares also fell as London copper was on track for a third straight weekly loss, after data showed Chinese industrial production weakened last month. Glencore was down 2.8% at the time of writing. Rio Tinto, BHP, and Anglo American fell were down between 1.3% and 1.9% at the time of writing.

Housebuilders Persimmon, Taylor Wimpey, and Barratt Development were down 2.6 to 5.5% as doubts persisted over PM Theresa May’s ability to secure tweaks to her Brexit deal from EU leaders.

Other top losers in the FTSE 100 include- Next (down 2.1%), BAT (down 2.1%) and TUI (down 2.8%) at the time of writing.

On the other hand,  GVC stock rose 8.4% ahead of next week’s parliamentary vote on fixed-odds betting terminals. The markets expect that the vote would be a significant positive catalyst for the stock, eliminating the possibility the company would have to pay out around 676 million pounds to shareholders.

The FTSE 100 along with the pan-European index, was on track for its worst quarter since 2011, according to sources.

On the technical front, the RSI is currently at 42.82% and suggests that the market can continue trading sideways. The current price is below the MA20 (6934). The current price is below the middle line of the Bollinger Bands and is heading downwards.

Overall Bias is Negative and short-term trades can be initiated with tight Stop Loss and Profit targets.

 

Trade Suggestion- Limit Sell at 6880. Take Profit at 6830. Stop Loss at 6905

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