FTSE 100 Falls After Strong UK Q3 GDP – Here’s the Reason
The FTSE 100 is set to open lower as part of the global decline in stocks. Futures tied to the index are down by 0.60% and are trading at £6,333. It is also shrugging relatively strong Q3 GDP data from the UK.
What’s happening: Global indices, including the FTSE 100, DAX index, and Dow Jones are struggling today as risks of the new strain of coronavirus introduces new risks to the market. More countries have continued to place limits on travel to the UK. As such, investors are worried that these lockdowns will have a negative impact on FTSE 100 earnings.
UK impressive Q3 GDP: The FTSE index is struggling even after the relatively strong economic numbers. According to the ONS, the economy expanded by 16% in the third quarter, a better performance than the second estimate of 15.5%. On an annualised basis, the economy contracted by 8.6%, better than the previous estimate of 9.6%. Business investments too rose by 9.4%
But debt rose: However, the numbers showed that public debt continued to rise. Public debt rose by more than £30.8 billion, higher than the previous £27 billion and the consensus estimate of £27 billion. FTSE companies to watch: The companies to watch today in the FTSE 100 will be retailers like Ocado, Sainsbury, and Tesco. Also, traders will focus on Vodafone, which ended talks of selling its Egyptian stake to Saudi Telecom. Further, Covid-associated companies like IAG, Rolls-Royce, and InterContentlal will be watched closely.
FTSE 100 technical outlook
On the daily chart, we see that the Footsie found intense resistance at the 61.8% Fibonacci retracement level. It has also moved below the 25-day exponential moving average and is attempting to move below the 50 EMA. Therefore, with sentiment being weak, we will possibly see the index continue falling.