FTSE 100 trades lower today on news of a big increase in new cases and deaths from the Coronavirus (COVID19) in China. Yesterday have reported 14,840 new COVID19 cases in one day and 242 deaths. Now in total there are 60,342 cases, 1,369 deaths confirmed while 6,074 patients have recovered. Yesterday there were hopes that the coronavirus crisis was being stemmed, but the last 12 hours the perceptions have changed. Doubts raised among investors as to whether China will be able to contain the spread of the coronavirus in the very near future. The uncertainty pressures risky assets across the board.
Economic data around the globe point to slowdown; keep in mind that the recent data are before the coronavirus outbreak. The Euro-Area industrial output slumped most in the last four years. Production dropped 2.1% in December. S&P Global expects that the coronavirus impact will cut 0.1% to 0.2% off the Eurozone and UK growth rate in 2020 seeing lower business investment and exports.
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FTSE 100 Technical Analysis
FTSE 100 is 0.93% lower at 7461 retreating from monthly highs. The index broke below the 50-day moving average earlier and now more sellers might joint the action. The technical outlook is neutral now for the short term while the renewed coronavirus fears weigh on stocks.
On the downside, first support for the index stands 7453 the daily low. If the FTSE index breaks below, the next support area for the FTSE 100 is at 7410 the low from February 5th. The 100-day moving average at 7386 is the critical support level, which if breached will cancel the bullish momentum.
On the upside, the first hurdle for the FTSE stands at 7,534 the daily top. The next resistance for the FTSE index is at 7,585 the high from January 27th. The high from January 24th at 7642 will provide the next supply zone.
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