FTSE 100 Finishes 2019 on a Bearish Note as Brexit Concerns Loom
The FTSE 100 finished 2019 on a bearish note. The UK’s blue-chip stock index closed lower 29.8 points or 0.39% lower at 7,550.0. Meanwhile, FTSE 100 CFDs are trading slightly higher in today’s Asian session. The stock index is trading around 7,575.0 after opening at 7,556.3.
Gainers and Losers
Gains were led by Just Eat PLC when it closed with a 1.11% profit. In second was Fresnillo with a 0.62% gain. Ashtead Group then came in third with a 0.58% uptick. Meanwhile, the London Stock Exchange and Imperial Brands PLC rounded up the top five stocks on December 31’s trading at +0.41% amd +0.40%, respectively.
On the other hand, losses were led by BAE Systems PLC at -2.21%. Fegurson PLC was the second-biggest loser at -2.10%. In third was NEXT which was in the red by 1.80%.
Brexit Concerns Catching Up on FTSE 100?
FTSE 100 had no more Santa Claus rally left to end 2019 on a bullish note unlike the Dow Jones. It could be that no-deal Brexit concerns have already begun to weigh down the stock index. Remember that the UK’s divorce from the European Union is set on January 31. By mid-January, European policymakers will meet to agree on the Withdrawal Agreement which was already passed in the House of Commons.
There is growing skepticism among market participants that the UK may end up with a no-deal Brexit given Prime Minister Johnson’s hard line stance on the issue. He has previously passed a bill that would make it illegal for Parliament to extend the transition deadline beyond December 31, 2020.
On the hourly time frame, we can see that FTSE 100 CFDs on the hourly chart is testing a confluence of resistance around 7,580.0. For one, this price coincides with the falling trend line when you connect the highs of December 27, December 30, and today’s Asian session highs. It also aligns nicely with the 200 SMA. Lastly, when you draw the Fibonacci retracement tool from the high of December 30 to the low of December 31, the stock index also faces resistance in the area between the 38.2% and 50% Fib levels. Reversal candles around this price could indicate that sellers are getting ready to push prices back down to its December 31 lows at 7,529.4. If support at that level does not hold, the next support level is at 7,495.2 where the index previously hit lots on December 18.
On the other hand, a strong bullish close above the falling trend line could mean that buyers may soon push the FTSE 100 to resistance at the 100 SMA at 7,607.5. If resistance at this price does not hold, the next ceiling could be at 7,667.5 where the stock index peaked on DEcember 27.