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FTSE 100 Retreats from November Highs As Investors Brace for UK Elections

UK stocks sold off on Friday. FTSE fell by 70.9 points or 0.96% points to 7,350 as market participants square their positions ahead of a busy week ahead.

The biggest loser was Tesco with a 3.37% loss for the day at 229.40, followed by J Sainsbury which was down 2.99%. In third was St. Jamess with finished 2.73% in the red.

On the other hand, gainers were led by Ocado Group. The online retailer enjoyed a bullish rally when it announced that it partnered with Aeon, which is Japan’s largest supermarket.

Poll Results to Affect FTSE 100?

According to some reports, a few investors are minimizing their risks ahead of the UK elections which is scheduled on December 12. Last week, poll results from YouGov suggests that the Conservatives may get majority seats in parliament. If true, it would be easier for incumbent Prime Minister and Tory party leader Boris Johnson to pass a Brexit plan. However, it would seem that this was not enough for market participants to feel at ease in exposing their portfolios to UK stocks. The latest poll from Survation, which was released over the weekend, may only add to market jitters. Statistics show that the Conservatives lead narrowed to 9 points over Labour. This caused GBPUSD to incur a 30-pip weekend gap.

UK Data Scheduled for this Week

For this week, a few reports are due from the UK which could affect the FTSE.

Later this morning at 9:30 am GMT, the final manufacturing PMI is eyed to print at 48.3.

Then, tomorrow at 12:01 am GMT, the BRC retail sales monitor is forecasted to show a 0.4% decline in consumer spending from a year ago. Meanwhile, at 9:30 am GMT, the construction PMI is expected to show that activity in the sector somehow improved November with the forecast at 44.5 from 44.2 in October.

On Wednesday, the final services PMI for September has the consensus at 48.6.

Lastly, on Friday, Halifax’s report on house prices is eyed to post a 0.2% uptick.

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FTSE 100 Outlook

On the 4-hour chart, we can see that resistance at FTSE’s month-to-date highs held. The stock index retreated from 7,432.9 on Friday. In fact, it did not find any support on the 100 SMA as it closed below the moving average.

If sellers continue to dominate today’s trading, FTSE could track lower to around 7,260.9. This price coincides nicely with the rising trend line from connecting the lows from October 3 and November 21. It is also a previous support level for the index on October 31, November 11, and November 15.

On the other hand, if risk appetite picks up today, FTSE could rally back up to re-test resistance at 7,432.9.Download our latest quarterly market outlook for our longer-term trade ideas.

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