The FTSE 100 is off to a bearish start in today’s trading as risk aversion stemming from the coronavirus pandemic continue to weigh down sentiment. As of this writing, UKX is down over 6% or 320 points, trading around 5,032.2.
Leading today’s losses on FTSE 100 is Associated British Foods which is down by a whopping 59.61% for the day. Its retail chain, Primark, has closed 20% of its store space. The company also said that it will not provide a full-year forecast because the coronavirus pandemic has adversely affected its operations.
The second-biggest loser among stocks tracked by the FTSE 100 is TUI. The tourism company is in the red by 28.72% after it asked for state aid as coronavirus fears has forced it to suspend most of its operations. In third place is Easyjet which is down by 23.51%. A statement from the company warned that more flights would be grounded in the coming weeks as coronavirus-related cancellations pile up.
Over the weekend, the FOMC and other central banks have stepped up their monetary stimulus efforts. A few weeks ago, these would have been welcomed by market investors. However, for as long as there is no tangible solution to the coronavirus pandemic, it would seem that investors would be hard pressed to go long equities.
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FTSE 100 Outlook
On the monthly time frame of FTSE 100 CFDs, we can see that the UK’s stock index has fallen to its lowest levels since August 2011 at 4,835.9. It has somehow steadied as it currently trades at 5,073.1. If there are enough buyers to keep the stock index from closing below today’s low at 4,835.9, it could be a sign that FTSE 100 may soon recoup some of its losses. There is near-term resistance at last week’s lows at 5,201.3.
On the other hand, if FTSE 100 closes at 4,835.9, it could signal more downside on the stock index. The next support that it could trade to would be at 4,656.4.
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