The FTSE 100 index is set to erase most of its gains yesterday as investors react to the strict lockdown imposed in London. The index is also reacting to the mixed jobs numbers from the UK.
What happened? In a statement yesterday, the chief health secretary in London said that scientists had identified a new variant of coronavirus. As a result, he directed that London should move to a level 3 lockdown, meaning that most non-essential businesses will close. That will have a major impact on many companies in the FTSE 100.
What about UK jobs? The FTSE 100 is also reacting to the latest jobs numbers from the UK. According to the ONS, the unemployment rate rose by 4.9% in October. That was less than what most analysts were expecting. Still, the ONS expects that the rate will continue rising in the near term. Further data showed that redundancies continued to rise in October. The three-month rate rose to a record 369.9k.
FTSE 100 companies to watch: Travel-related companies will be the ones to watch in the FTSE 100 index today. This includes companies like Rolls Royce, IAG, InterContinental, and Meggitt. Other firms to watch will be BT Group, which will possibly react to news that BT Sports is about to end its bid for Rugby TV rights.
What next for FTSE 100: On the four-hour chart, the FTSE 100 has been on a downward trend recently. It has moved from a high of £6,640 and reached a low of £6,516. The index has also moved below the 25-day and 50-day exponential moving averages.
It is also between the ascending channel that is shown in black. Therefore, the index will remain under pressure as bears aim for the next support at £6,450. On the flipside, a move above £6,600 will invalidate this trend.
