FTSE 100 Index plummets to its new weekly lows as bearish sentiment surrounds UK equities. The benchmark index plunged 3.2% after retesting its monthly highs. At press time, the British benchmark index stood at 7,433 points and is down 2.22% on the weekly time frame.
The rising geopolitical tensions in the Middle East and the supply tightening of oil have weighed in on UK shares as they plunge to their new monthly lows. Furthermore, the CPI numbers for September also edged up slightly, which further solidified the chances for rates to remain high for long term.
UK Stocks Plunge As Investors Look For Safer Options
We can safely say that the third week of October has not been kind to the UK stock market as investors dump their risky assets in favor of precious metals. Additionally, September’s retail sales figures showed a 0.9% decline in the sales level.
The latest data suggested that UK consumers refrained from spending money on non-essential items due to the rising cost of living that plagues the UK economy.
The GfK consumer confidence indicator has hit negative 30, which is its lowest level since June. This statistic shows that the purchasing power of consumers is diminishing. This can also be attributed to the uncertainty in the market amid geopolitical tensions coupled with the ever increasing cost of living in the UK.
FTSE 100 Index Technical Analysis
The FTSE 100 index is in search of new monthly lows after another rejection from the 7,680 points level. I have repeatedly predicted this move in the index via my previous forecasts. The index has also slid 1.6% after a breakdown below the black downward trendline shown in the following chart.
I expect the index to retest its monthly lows soon, provided the bearish momentum sustains. Further confirmation of the FTSE 100 forecast flipping bearish would be a breakdown under the 7380 level. In this case, the index may slowly grind towards its yearly lows of 7200 points for some support.
