FTSE 100 started the session lower as the fears for a second lockdown rise across the continent. A warning from the Fed that the economic recovery in the USA has stalled rattled investors and sent Wall Street sharply lower. Jerome Powell called for an extension of fiscal stimulus from Congress to boost the economy.
Investors in London, waiting for Rishi Sunak Winter Economy Plan and the announcements on a new relief package and the furlough scheme. The Chancellor of the Exchequer, Sunak said yesterday that the next year’s budget had been cancelled, as it needs to include new measures to support the businesses most affected by the coronavirus. The plan expected to include loans for small businesses and probably a VAT cut.
British Airways parent IAG is 3.76% lower on the fears that the second lockdown would ground most of its aeroplanes. Lloyds banking group is 1.40% lower at 24.25, while HSBC is 0.53% lower at 288.68. The selling pressure persists in Rolls Royce as it is 3.11% lower at 157.25 after the company announced that it is planning an equity offering.
FTSE 100 is 0.73% lower at 5,856 attempting to rebound from the daily lows ahead of the Rishi Sunak’s announcements. The technical outlook is bearish, and lower levels are on the cards.
Support for the FTSE 100 index is at 5,821 the intraday lows. Next support for the index is at 5,772 the low from September 21. A break below would open the way for 5,659 the low from May 14.
On the contrary, resistance for the index would be met at 5,899 the daily high. More selling pressure might emerge at 5,982 the high from yesterday’s trading session. What can cancel the bearish sentiment is a break above the 50-day moving average at 6,047.
