FTSE 250 Forecast as Aston Martin and EasyJet Shares Crash

Summary:
• The FTSE 250 index declined sharply on Thursday after the hawkish statements by central bank governors and the dimming outlook of the economy

The FTSE 250 index declined sharply on Thursday after the hawkish statements by central bank governors and the dimming outlook of the economy. The index slipped by more than 1.45% and is trading at £18,645. The FTSE 100 slumped by 1.85%, while the DAX index dropped by over 2.35%. The same trend is happening in the US, where futures tied to the Dow Jones and Nasdaq 100 fell by more than 1%.

Top laggards in the FTSE 250 index

Most companies in the FTSE 250 index are in the red. According to Hargreaves Lansdown, Virgin Money, JLEN Environmental Assets, Capital Gearing, and Euromoney are the only companies soaring. All these shares have risen by less than 2%. 

Aston Martin share price has crashed by over 6.30%, becoming the worst-performing stock in the FTSE 250 index. It is trading at 445p, which is its lowest level on record. The stock has fallen by more than 95% from its all-time high. 

The other worst-performing stock in the FTSE 250 index is Liontrust Asset Management, which has fallen by 6.20%. The other notable laggards are Hochschild Mining, easyJet, Caledonia Investments, and Wizz Air. In addition, companies like Tate & Lyle, Oxford Instruments, and Weir Group have also slumped.

The main catalyst for the FTSE 100 and FTSE 250 is the statements by Jerome Powell and Andrew Bailey. The two central bank officials said they will continue hiking interest rates and tightening liquidity to lower prices.

Another reason is that the UK economy is in trouble. Data published by Nationwide Society showed that the house price index (HPI) declined from 0.9% to 0.3% on a month-on-month basis. It then dropped from 11.2% to 10.7% on a YoY basis.

FTSE 250 forecast

The daily chart shows that the FTSE 250 index slumped to a low of £18,500 as global equities collapsed. The index is at important support since it has struggled moving below this level several times this year. However, it remains below the 25-day and 50-day moving averages. It has also formed what looks like a bearish flag pattern. 

Therefore, there is a likelihood that the stock will keep dropping as bears target the key support at £18,000. However, a move above the resistance at £18,800 will invalidate the bearish view.