The FTSE 100 index is off by more than 0.80% in the futures market as investors worry about the new strain of covid in the United Kingdom and the rising prospects of no-deal. The Footsie is trading at £6,421, which is below this month’s high of £6,643.
What happened: The FTSE 100 is struggling as worries of the new aggressive strain of the virus continues to spread in the country. That has led the Johnson administration to announce a new lockdown in England. At the same time, countries like Germany, France, and Belgium have also barred travel to and from the UK.
That’s a risky thing for FTSE 100 constituents because it will affect their sales. It could also lead to supply chain constraints in the near term.
What about Brexit: The index is also falling because of the probability that the UK and EU will separate without a deal. That’s because the two sides did not make any progress during the weekend and the fact that time is running out. As we have written before, a no-deal Brexit situation would be damaging to many companies in the FTSE 100.
What’s happening elsewhere: In Europe, futures tied to the DAX index are down by more than 1% while those tied to the CAC 40 have fallen by more than 0.50%. In the United States, the Dow Jones, Nasdaq 100, and S&P 500 futures are also wavering as traders react to the new stimulus deal by Congress.
What next for FTSE 100: On the four-hour chart, we see that the FTSE 100 declined sharply today. It moved below the important support at £6,489 and reached a low of £6,425, which was the lowest level since December 3.
The price has also moved below the 25-day and 15-day exponential moving averages. Therefore, with more negative news coming from the UK, it will likely continue to fall with the next key target being at £6,400.
