FTSE 100 Slides After UK Employment Data Point to Severe Economic Downturn

FTSE 100 slide in early trading after UK payroll employees fell by 650k in June, a 2.2% drop but the rate of decline in employment had slowed in June compared with May. From March till May, the total weekly hours worked decreased by 16.7% to 877.1 million hours, the largest annual decrease on record. Average weekly earnings dropped 0.3% in the three months to February, marking the first contraction since 2014. The employment data shows that the UK economy is in a severe economic downturn.

Investors also digested economic data from China. The retail sales from China disappointed investors. The retail sales in June fell 1.8% well below the expectations of +0.3%. On the other hand, the GDP grew 3.2%, beating the forecasts of 2.5% showing signs of recovery after the lockdown. The Industrial Production came in at 4.8% topping the estimates of 4.7% in June.

Stocks that move the FTSE 100 today are: Lloyds Banking Group (LLOY), is 0.07% lower at 30.36, HSBC is 0.62% lower at 383.68, BT Group is 0.13% higher at 113.63. Tesco is 0.65% higher at 215.75. Barclays (BARC) is 0.10% lower at 120.15, RBS is 0.12% lower at 121.35. Vodafone (VOD) is 1.10% higher at 128.90.

FTSE 100 Daily Technical Analysis 

FTSE 100 is 0.93% lower at 6,234 as the index retreat from three-week highs but keeps the positive momentum alive as the index stays above the 50-day moving average. A break below the support at 50-day moving average would open the way for further correction. The long term technical picture for FTSE is bearish as the index trading below the 200-day moving average.  

On the downside, initial support for the FTSE 100 index will be met at 6,230 the daily low. If the sellers, break that support, then the next target is at 6,148 the 50-day moving average. Next support zone for FTSE 100 stands at 6,002 the 100-day moving average.     

On the flip side, the immediate obstacle for the FTSE index is at 6,296 the daily top. The next hurdle for the FTSE index stands at 6,329 the high from yesterday’s trading session. The next supply area for the index is at 6,474 the high from June 9.

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FTSE 100 Daily Chart

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