FTSE 100 trade higher but off the daily highs as the risk-on sentiment continues after the rally in Asian markets. Wall Street ended higher on Friday after President Donald Trump left the trade deal with China intact and he avoided imposing any sanctions on Chinese officials. On the other hand, President Trump withdrew as expected Hong Kong’s special status after the new security law imposed by China.
Better economic data from China also supports the investor’s sentiment. The factory activity in China as presented by the Manufacturing Purchasing Manager’s Index (PMI) registered in at 50.6. That was below the 50.8 reading in April and below the expectations of 51.0. The Caixin/Markit manufacturing PMI for May came in at 50.7, beating the expectations of 49.6.
FTSE 100 gave up some gains after China threatens to impose countermeasures on US actions. There also some news that Chinese officials asked major state-run agricultural firms to stop the purchases of some American farm goods, such as soybeans.
On the data front, the United Kingdom Markit Manufacturing PMI came in at 40.7 in line with expectations in May.
Lloyds Banking Group (LLOY) adds 2.68% at 30.66, Glencore plc (GLEN) is 3.30% higher at 154.77, Barclays (BARC) is 1.89% higher at 117.41, HSBC is 1.61% higher at 376.00, Royal Bank of Scotland is 4.10% higher at 114,88 and Vodafone (VOD) is 1.13% higher at 134.52.
FTSE 100 is 1.01% higher at 6,137 recovering some of Friday’s losses, as the short term momentum is positive above the 50-day moving average targeting the critical resistance at the 100-day moving average. The technical outlook remains bearish for the long term as the index trades below the 100 and 200-day moving averages.
On the upside, initial resistance for the index stands at 6,179 the daily top. More selling pressure will emerge at 6,229 the high from May 28. In case the index breaks higher, the next hurdle will be met at 6,423 the 100-day moving average.
On the other hand, first support for the FTSE 100 index will be met at 6,076 the daily low. Below that next support area stands at 5,888 the low from May 22. If the sellers break that level, then the next support is at 5,760 the 50-day moving average.