FTSE 100 Tumbles in Early Trading on Coronavirus Outbreak
FTSE 100 is giving up 1.38% at 7481 as investors attention turns to the coronavirus outbreak. As of writing the coronavirus has killed 80 people and there are 2744 confirmed cases. Chinese officials have quarantine 17 cities with over 40 million population in an attempt to stop the virus spread. The coronavirus spread will have a significant impact on 1Q economic growth as consumption and transportation got a hit on the chin.
The Bank of England will decide on Thursday about the next monetary policy move. The positive economic data from the UK last week have lowered the possibility of an interest rate cut on Thursday.
FTSE 100 gives up over 110 points making fresh monthly highs, and approaching fast the 50-day moving average. The index correction from 2020 highs continues amid the coronavirus spread and lower expectations of an interest rate cut later this week.
On the downside, intraday support for the FTSE 100 index stands at 7,461 the daily low. If FTSE 100 index breaks below, the next critical support zone will be met at 7350 the 50-day moving average. Next level to watch for the bears stands at 7370 the 100-day moving average.
On the upside, initial resistance for the FTSE index stands at 7,586 the daily top. The next barrier for FTSE will be met at 7638 Friday’s session high. The yearly high from July 30th at 7,727 is the next strong resistance.