FTSE 100 started the session higher on cautious mood as the escalation in tension between China and USA weighs on sentiment. US administration ordered the closure of the Chinese consulate in Houston, Texas, over spying allegations. China immediately warned that it would retaliate and some reports said that China would be closing the US consulate in Chengdu.
Some reports that the UK is close to abandoning hope of striking a deal with EU as the two sides are far away on critical issues. The UK government deadline comes up at the end of this month, with no indication that the two parts are close to an agreement on any of the crucial issues. The UK expects trade with Europe to be on World Trade Organisation rules when the Brexit transition period ends by the end of 2020.
In corporate news, Unilever is 7.64% higher at 4,660 after the company reported a better than expected drop in 2Q sales helped by strong growth in North America which offset the impact of the coronavirus lockdowns in the UK.
HSBC is 0.13% lower at 370.05, Lloyds Banking Group (LLOY), is 0.18% lower at 30.27, Tesco is 0.75% lower at 212.90. BT Group is 0.96% lower at 112.95. Barclays (BARC) is 0.51% lower at 116.76, RBS is 0.37% lower at 120.90. Vodafone Group (VOD) is 0.18% lower at 129.67.
FTSE 100 Daily Analysis
FTSE 100 is 0.59% higher at 6,244 as the index continues to test the support at the 50-day moving average. Traders are waiting for a breakout of the recent narrow trading range between 6,100 and 6,300. The current positive momentum will be cancelled if the index breaks below the 50-day moving average.
On the upside, the first hurdle for FTSE index is at 6,253 the daily high. The next obstacle for the FTSE 100 index stands at 6,316 the high from July 21 trading session. More selling pressure would emerge at 6,474 the high from June 9.
On the other hand, the immediate support for the FTSE 100 index will be met at 6,207 the daily low. If the sellers, break that support, then the next target to the downside would be at 6,181 the 50-day SMA. Next support for FTSE stands at 5,969 the 100-day moving average.