The FTSE 100 index is falling today as investors remain worried about fiscal stimulus in the United States. The index is down by 0.43% and is trading at £5,917. Other European bourses are also in the red, with the DAX index falling by 0.30% and the Stoxx 50 falling by 0.45%.
The FTSE 100 index soared yesterday as investors reacted to positive news about Donald Trump’s health. On Sunday, the president had taken a short drive and his doctors hinted that he would be discharged yesterday. He did. This removed the immediate risk that the US president was in danger, which would throw the country in turmoil.
Today, UK stocks are falling because of the uncertainty about stimulus in the United States. Most importantly, they are worried because talks between Steve Mnuchin and Nancy Pelosi ended without a deal yesterday. While the talks will resume today, there are concerns that the two sides may not reach an agreement.
A US stimulus is positive for the FTSE 100 for two reasons. First, most companies in the index do a lot of business in the United States. Second, without stimulus, there is a possibility that the US recovery will stall. This could spill-over to the United Kingdom.
Meanwhile, the FTSE is falling even after some positive construction PMI data from the UK. Data from the showed that the PMI increased to 56.8 in September, boosted by rising demand for homes.
Rolls Royce share price is the best performer in the FTSE 100 today. The shares are up by almost 10% as investors react to the news that the company is planning to raise more than £3 billion as its civil aerospace division tank. Still, Rolls-Royce stock is down by more than 60% this year and is in its lowest level in decades.
Rolls Royce Share Price is at its lowest level since 2003
Other top performers in the FTSE are Melrose Industries, IAG, Barclays, and BT Group. On the other hand, the worst-performers are Ocado, Rentokil, Intertek, and Sainsbury. Ocado share price has slumped because of the rising competition from Waitrose.
Ocado stock has been under pressure
FTSE 100 technical outlook
The daily chart shows that the FTSE 100 index has been in a slow downward trend in the past few days. Along the way, it has formed a descending triangle pattern that is shown in green. The price is also below the dynamic resistance of 50-day exponential moving average. It is also slightly above the 38.2% Fibonacci retracement level.
Therefore, a descending triangle is usually a sign that the price will continue falling once the two lines reach a confluence zone. As such, for today, the price will likely remain inside this triangle.