FTSE 100 HITS 2-YEAR LOW ON FED, RETAIL SALES OUTPERFORM

FTSE 100 futures are currently trading at 6673-higher by 0.78% as compared to the previous closing. However, the index futures closed in the negative territory in the previous trading session.

In the cash markets, FTSE 100 was off by 0.33% at the time of writing. Earlier in the session, the broad market index was down almost 2% and hit its lowest level since 2016.

The midcap index FTSE 250 was down 0.37% at the time of writing.

On the interest rate front, the Bank of England left its key interest rate on hold at 0.75% today, in a unanimous vote by the Monetary Policy Committee.

Oil and related stocks were the biggest drags on the main index. Index-heavyweight BP was down 1.5% at the time of writing.

The Fed interest rate hike and falling greenback also knocked mining shares, with index members BHP Group, Antofagasta, Rio Tinto and Anglo American all down between 1.9% and 3.3%. Mining share Randgold was down 1.9% at the time of writing.

The retail sector also hit fresh lows, plunging to its lowest since October 2014. Index-constituent Next was among the sector’s worst performers.

On the other hand, Utilities, often seen as a safe haven, helped the benchmark recoup some losses. National Grid was up 2.7% after a rating upgrade by CFRA, with peers United Utilities and Severn Trent also gaining at the time of writing.

Other top gainers in the FTSE 100 include- Shire (up 2.1%), SSE (up 1.4%) and BAT (up 1.2%) at the time of writing.

The UK indices are on track for their worst year since the 2008 financial crisis, and the Federal Reserve’s tone deepened concerns already augmented by Brexit worries.

On the data front, Retail Sales (MoM) for November released earlier today came in at 1.4%. Sales growth was above the consensus estimates of 0.3%.

On the technical front, the RSI is currently at 35.52% and suggests that the market can move in the upward direction. The current price is below the MA5 (6678). The current price is below the middle line of the Bollinger Bands but is heading upwards.

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

 

Trade Suggestion- Limit Buy at 6660. Take Profit at 6690. Stop Loss at 6645

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