FTSE 100 starts lower the first trading day of the week amid fears of a second wave of coronavirus infections. Apple decision to re-close 11 stores in Florida increase investors worries that the rising cases of new coronavirus infections will cancel the easing of lockdowns in the USA and Europe.
UK government is considering a cut to value-added tax (VAT) for some sectors to offset the coronavirus impact, ahead of the relief package expected by next month. Tomorrow Boris Johnson expected to announce which areas of the economy will reopen on July 4; analysts expect that pubs and restaurant to reopen on that day.
The previous week the Bank of England kept interest rates unchanged and increased the QE programme by 100 billion. Some analysts expect that the BOE will sooner or later will proceed with negative interest rates while they expect BOE to increase the QE programme by another 100 billion in August.
BT Group is 1.10% higher at 119.85 Vodafone (VOD) is 0.19% lower at 127.49, Ocado is 0.05% higher at 2,000. Lloyds Banking Group (LLOY) is 1.19% lower at 31.86, Barclays (BARC) is 0.49% lower at 116.75, and RBS is 0.49% lower at 121.63. Tesco continues higher for one more day after it announced the previous week that sold the Polish business to Denmark’s retailer Salling Group for £181 million.
FTSE 100 is 0.39% lower at 6,267 as the index struggles to hold the above the 100-day moving average. The technical outlook remains positive for the short term as longs as it stays above the 100-day moving average. A break below the 100-day moving average might cancel the bullish momentum.
On the downside, initial support for the FTSE index will be met at 6,228 the daily low and the 100-day moving average. Next support zone for FTSE stands at 6,182 the low from June 18. If the bears break that support, then the next target is at 6,065 the low from June 16.
On the other hand, the first resistance for the FTSE 100 is at 6,293 the daily top. The next obstacle stands at 6,382 the top from June 10. Next level to watch is at 6,475 the high from June 9.