FTSE 100 Holds Above 5,800 As Public Debt Skyrockets!
FTSE 100 trade slightly higher after yesterday’s sharp losses amid the rising number of new infections in the UK and Europe. A short bounce in Wall Street yesterday after the Democratic lawmakers said that is planning a 2.2 trillion new relief package improved investors sentiment.
Rishi Sunak Announcement
Rishi Sunakannounced yesterday the extension of the job support scheme. Starting in November, the taxpayer would no longer pay part of the wages of the three million employees who are out of work. Now the Treasury would subsidize people who worked at least one-third of their regular working hours. The programme would help between 2 million to 4 million part-time.
Mr Sunak also said that hotels, restaurants, pubs and cinemas would continue to pay a 5% VAT until March next year at the cost of £835 million. The winter economic plan estimated to cost up £10bn in the next six months.
UK Public Debt Hit Records
Investors keep an eye on the Public sector borrowing, which has reached £35.19 billionin August. In August 2019 the government borrowed 5.4 billion. In 2020 the government borrowed 173.5 billion a record high; the previous record was 158 billion in 2009.
Vodafone To Buy MasMovil
In company news, there are reports that Vodafone has started talks to buy the Spanish telco company MasMovil. The banking sector rebounds today with Lloyds adding 2.14% at 25.11 and NatWest is 1.55% lower at 100.88. Rolls Royce extends losses while IAG is 5% lower on second lockdown fears.
FTSE 100 Technical Analysis
FTSE 100 adds 0.19% at 5,834 as the bulls attempt to hold above the 5,771 support which protected the index since May. The index consolidates the recent sharp correction above the 5,800 mark.
Bulls would face the resistance at 5,900 the top from yesterday’s trading session. The critical obstacle is the 50-day moving average at 6,038. A break above would attract more bids, which might challenge the 100-day moving average resistance at 6,093.
On the other side, support for the index would be met at 2,815 the daily low. As we can see on our FTSE daily chart, the critical level on the downside is the 5,771 support. A break below would open the way for a move down to April lows.