FTSE 100 Ignores Disastrous PMI’s, Focus On Reopening

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FTSE 100 trades lower after disastrous UK PMI readings as the economy has been hard by the coronavirus outbreak. The UK Services Business Activity Index tumbled to 12.3, below the expectations of 29, the March reading was at 29. The UK Manufacturing PMI dropped from 47.8 in March to 32.9 in April the market consensus was at 47.8. The composite PMI came down to 12.9 at an all-time low, the expectations were for 31.4, and the March reading was at 36.

The PMI survey collected data from 7 to April 21, also shows record lows in new orders, backlogs of employment and work. The majority of businesses were forced to close or impose strict social distancing measures, including working from home, since March 23.

According to the survey, 81% of UK service providers and 75% of manufacturing companies reported a fall in business conditions during April. Now analysts expect that GDP will contract by about 6.5% to 7% in the quarter.

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FTSE 100 Technical Levels

FTSE 100 is 0.06% lower at 5774 as the consolidation between 5,600 and 5,800 continues despite the dismal economic data reported earlier today. The index ignores the disastrous economic data and focuses on the relief measures and the easing of the lockdown that will change the economic outlook. The technical picture for the FTSE 100 index is neutral to bearish, but a move above the 5,900 the recent high might attract more buyers.  

On the downside, first support for FTSE 100 stands at 5,735 the daily low. If the FTSE breaks lower, the next support area is at 5,635 the low from yesterday’s trading session. More solid support for the FTSE index would be met at 5,571 the low from April 15.

On the flip side, first resistance for the index stands at 5,781 the daily top. The next resistance for the FTSE 100 index is at 5,814 the high from April 21. If the index breaks above 5,814 the next supply zone will be met at 5,900 the high from April 14. 

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