FTSE 100 FALLS AS M&S PLUNGES ON OCADO DEAL RIGHTS ISSUE; BREXIT IN FOCUS
FTSE 100 futures are currently trading at 7063-lower by 0.63% as compared to the previous closing. The contract closed in the negative territory in the last trading session also.
In the cash markets, the blue-chip share index slipped 0.79% to 7094.85 at the time of writing. The broad-market index fell today as Marks & Spencer plunged after announcing a rights issue to fund an online food joint venture with Ocado.
The midcap index FTSE 250 was down 0.62% at the time of writing.
Index-member M&S plunged more than 10% and was on course for its steepest one-day decline in more than two and a half years after saying it would finance the Ocado deal from a rights issue to raise up to £600 million and a dividend cut.
Ocado(up 1.97%) has pared some of its gains after rising 5% as M&S said it would pay £750 million to own half of the online grocer’s UK retail business.
Stocks of exporters, who earn a major chunk of its earnings in dollars, were also dragged down by a stronger pound and tensions between India and Pakistan.
The pound extended this week’s gains on Wednesday on growing hopes of a Brexit delay as Prime Minister Theresa May offered lawmakers the chance to vote for a no-deal or delay Britain’s European Union divorce.
Index-components Unilever and Reckitt Benckiser were dragged lower with Beiersdorf. Beiersdorf fell to two-year lows today after the Nivea skin cream maker issued a shock warning about its 2019 operating margins, with the company’s new CEO declaring the consumer goods industry was in “turmoil”.
On the other hand, Rio Tinto’s stock was up 0.62% after it announced a special dividend and reported better-than-expected earnings for the year.
On the economic front, Gross Mortgage Approvals released earlier today came in at 40.6K. Mortgage Approvals were above the market expectation of 38.5K.
On the technical front, the RSI is currently at 54.2% and suggests that the market can move in the downward direction. The current price is below the MA5. 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 below mentioned Stop Loss and Profit targets.
Trade Suggestion- Limit Sell at 7075. Take Profit at 7035. Stop Loss at 7095