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FTSE 100 Drops Over 1% Amid Trade Concerns

coronavirus - trump
FTSE - Trump

FTSE 100 slumps lower for the third day in a row as global trade tensions escalate after U.S. President Donald Trump announced tariffs on steel imports from Argentina and Brazil while threatens France products for tariffs as retaliation to tax imposed by French government on U.S. tech companies. Above that President Trump in a comment earlier in London said that the U.S. – China trade deal might come after the U.S. election on November 2020.

On the macro front the United Kingdom Markit Construction PMI registered at 45.3 topping expectations of 44.5 in November. Yesterday, the United Kingdom Manufacturing PMI came in at 48.9, topping forecasts of 48.3 in November.

Conservatives Lead by 12% According to Polls

As we approach the election day on December 12th, investors closely follow the pols. A recent  poll from Kantar, shows that Conservatives lead over Labour increased to 12%, Conservatives got 44% while Labour party captures the 32%. The previous week poll provided an 11% lead. The news are Sterling positive as   a clear victory for the Conservatives will open the way for a Brexit plan

Wall Street indices finished sharply lower yesterday with Nasdaq giving up over one per cent, while today the Asian indices ended lower; Nikkei finished 0.64% lower at 23,379, and the Hang Seng ended 0.20% lower at 26.391.

In the U.S. calendar we await the ISM-NY Business Conditions Index and ISM-NY Current Business Conditions due at 14:45GMT.

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FTSE 100 Outlook Turns Negative

FTSE 100 index today breaks below the 50-day moving average as the slide accelerates after the index yesterday breached the 100 and 200-day moving average. Now the momentum has tilted to the downside and the index will test the first support at 7,197 the daily low, a support level that provided the rebound in November 21st. A convincing break below that area might force the FTSE index down to the next support line at 7,063.

On the upside, a positive sign for buyers will be if the index manages to close above the daily high at 7,285 where also stands the 50-day moving average. The next resistance level stands at 7,305 the 100-day moving average, while a move above that level might attract more buyers to join the action that could drive the index to the next hurdle at 7,420 the high from November 29.

European stock indices turned mostly lower midday after a positive opening, Dax 30 is 0.26% higher at 12,998 the CAC 40 in Paris trading 0.63% lower at 5,750 as President’s Trump comments weigh on investors sentiment. In Milan, the FTSE MIB is 0.40% higher at 22,820.More content