The FTSE 100 dropped almost 200 points on Tuesday as stocks reacted to a collection of bad news. The index has fallen to support near 5,800 but may be at risk of further losses in the days ahead.
InvestingCube's S&R Levels
The first problem for U.K. markets is the start of a second round of lockdowns across the country due to a rise in virus cases. The country has seen localized lockdowns lately, but the Prime Minister is set to address the nation on t.v. tonight to announce further restrictions. Some are suggesting a two-week London which would coincide with the October holidays.
Global indices were dragged lower by banking stocks after reports that banks failed to tackle money laundering clients. The report led by U.S. media outlets named U.K. banks HSBC, Standard Chartered, and Barclays as culprits and the news hit their share prices.
Finally, U.S. markets sold off on the bitter politics surrounding the appointment of a new Supreme Court Justice. Critics want President Trump to wait unti the election result is in before the seat is filled, with Democrats saying they will impeach the President if a new Justice is chosen before the November 3rd election.
FTSE 100 Technical Outlook
The FTSE 100 index has given up the 6,000 level and dropped heavily to support at 5,785. The price is at risk of a further fall to the 5,600-5,700 levels. There is a possibility that the market can bounce from this level but caution would be advised for the long side. The Investing Cube team is currently available to assist all levels of traders with a Forex Trading Course or one-to-one coaching.