The FTSE 100 (INDEXFTSE: UKX) Index failed to show any significant movement throughout the week after experiencing a rejection at 7523 points on Monday. The index is now trading 80 points below that level. At press time, it is sitting at 7447 points without showing any significant gain or loss on Friday.
The recent sell-off in UK equities can be attributed to the ongoing bearish sentiment in US stocks. The US indices are also having a pullback. The Nasdaq 100 index corrected 123 points, whereas the S&P500 saw a 0.32% decline on Thursday. The FTSE 100 currently stands 7.6% below its yearly high.
China has been making headlines after announcing a significant drop in imports and exports for August. The second-largest economy also announced a fall in PMI, suggesting weak consumer demand within the country. As a result, export-driven economies like the UK are facing headwinds.
In other news, US equities started to drop after the FED reported an improvement in consumer spending in the country. This raised concerns about interest rates remaining higher for a longer period. Investors are now on their toes as the next FOMC meeting has become very crucial.
The chart INDEXFTSE: UKX chart shows that the index is trading below the 200 MA. The index currently sits 2.5% below the key moving average. The British benchmark confirmed its break below the 200 MA on 11th Aug before plunging another 4.7%.
The FTSE100 Index forecast may flip bullish only if it reclaims the 200MA on the daily chart. The key moving average currently lies at 7,630 where also lies the downward trendline. In case of a deeper correction in equities, the index may retest the 7,206 support level once again.
I accurately predicted the rejection of the FTSE 100 from the 7,900 level in multiple forecasts. Therefore, you’re welcome to follow me on Twitter for my updated analysis of the index.
This post was last modified on Sep 08, 2023, 14:47 BST 14:47