FTSE 100 recovers the morning losses amid fear of a second wave of COVID-19 infections, that might halt the reopening of the economies in the USA and Europe. The sharp drop in risky assets based on the fact that the global economic recovery may take significantly longer than previously expected while a V-shaped recovery remains unrealistic for now.
Sharp Drop In UK GDP
United Kingdom Gross Domestic Product shrank by -20.4%, below the expectations of -18.4% in April, which was a month with the full lockdown. The Manufacturing Production also plunged to -24.3% below the expectations of -15.8% in April, while the yearly production dropped to -28.5% well below the expectations of -19.9%. The UK Index of Services registered in at -9.9% below the consensus -2%.
Ocado is 0.52% lower after 1 billion find raising yesterday. Lloyds Banking Group (LLOY) is lower for the second consecutive session, as of writing is 1.01% lower at 31.73, Vodafone (VOD) is 1.41% lower at 124.19, Barclays (BARC) is 1.63% higher at 116.90, RBS is 0.30% higher at 117.00, BT Group is 0.88% lower at 113.10 and Tesco is 1.58% lower at 224.00.
FTSE 100 is 0.70% higher at 6,119 as the index managed to reverse the morning losses in a volatile session as investors are nervous after yesterday’s sell-off The momentum is negative now from the index after yesterday breached below the 100-day moving average.
On the upside, the immediate resistance for the FTSE 100 is at 6,119 the daily high. The next obstacle stands at 6,306 the 100-day moving average. Next level to watch is at 6,396 the high from June 10.
On the flipside, initial support for the FTSE will be met at 5,993 the daily low. Next support zone stands at 5,927 the 50-day moving average. If the bears break that level, then the next support is at 5,795 the low from May 18.