FTSE 100 WOBBLY ON CPI AND WEAKER POUND
FTSE 100 futures are currently trading at 7227-higher by 0.18% as compared to the previous closing. The contract closed in the positive territory in the last trading session also.
In the cash markets, the blue-chip share index inched down 0.13% to 7314.41 at the time of writing. A weaker pound amid growing Brexit concerns offset a selloff in blue-chip miners and lifted the exporter-heavy index on Wednesday,
The midcap index FTSE 250 was down 0.29% at the time of writing.
The pound fell on uncertainty over Brexit, amid reports that PM Theresa May will request a short delay to Britain’s divorce from the bloc in a letter to the European Union. This helped internationally-focused shares rise on the main bourse.
Index-member Just Eat rose 1.58% after Jefferies increased its price target and said the online food ordering platform’s valuation was cheaper relative to its peers.
Other top gainers in the index include- DCC (up 2.63%), Burberry (up 1.83%) and Ocado Group (up 1.7%) at the time of writing.
On the other hand, home improvement retailer Kingfisher lost 2.41% after it reported lower full-year results and said it had started the process to find a replacement for chief executive Véronique Laury.
Mining shares dropped about 2.5% as iron ore prices fell in anticipation of increased supply after Vale SA was set to restart work at its largest iron ore mine.
Reports of possible friction in the U.S-China trade talks also weighed. Rio Tinto shed 2.37% and Antofagasta fell 0.68% as an HSBC rating downgrade also pressured the stock.
Official data released earlier today showed that Britain’s main inflation rate ticked up last month but stayed close to January’s two-year low, helping consumers maintain their spending power. U.K. CPI (YoY) for February released on Wednesday came in at 1.9%. The CPI growth was above the market expectation of 1.8%.
Wednesday’s official data also showed house prices rose at the weakest annual pace in 5-1/2 years in January, curtailed by the biggest drop in London prices since September 2009. The House Price Index (YoY) for January out today came in at 1.7%. The index change was below the consensus estimates of 2.3%.
On the technical front, the RSI is currently at 64.38% and suggests that the market can move in the upward direction. The current price is above the MA5. The %K has crossed %D from below to the upside at around 52% and suggests that the market can move in the upward direction.
Overall Bias is positive and short-term trades can be initiated with below mentioned Stop Loss and Profit targets.
Trade Suggestion- Limit Buy at 7220. Take Profit at 7260. Stop Loss at 7200