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FTSE 250 Index Retreats; But Heads for Second Week of Gains

The FTSE 250 index is down slightly today as traders focus on the happenings at 10 Downing Street and the rising number of Covid-19 cases. The index is trading at £19,290, which is slightly below this week’s high of £19,434. The blue-chip FTSE 100 index is also down by 0.45%.

Earlier this week, the FTSE 250 and other European indices rallied after Pfizer announced that its vaccine was 90% efficient. Similarly, in Russia, the government announced that the Sputnik vaccine too was 92% efficient.

However, in the past two days, indices have turned red mostly on profit-taking and worries that the virus is getting out of hand in some key countries. Yesterday, the UK confirmed more than 33,470 new cases, which was a record. Similarly, in the United States, which is a leading trading partner of the UK recorded more than 148k new infections. That is a signal that the virus will have immeasurable damage even when a vaccine arrives.

Meanwhile, UK politics are also pushing the FTSE 250 lower. According to media reports, Dominic Cummings, who is Boris Johnson’s chief advisor said that he will leave Downing Street by the end of the year. Cummings has been accused of leaking a government’s plan to introduce a lockdown in England.

Also, the index is falling because of the overall weaker GDP numbers that were released yesterday by the ONS.

XP Power is the best-performing stock in the FTSE 250 today. It is followed by CMC Markets, Royal Mail, Airtel Africa, and Scottish Investment Trust. The three companies have gained by more than 3%. On the other hand, WH Smith, Mediclinic International, Workspace Group, Cineworld, and Signature Aviation are the worst performers.

Read my earlier update on FTSE 100 index here.

FTSE 250 technical outlook

The four-hour chart shows that the FTSE 250 index has dropped from this week’s high of £19,435 and is now at £19,290. The price is still substantially above the 25-day and 15-day exponential moving averages. It is also above the important resistance of £18,203, which was the highest level on October 12.

Therefore, while the index is set to end the day lower, I believe that the index will continue rising in the coming week. However, there is also a possibility that the index will fall further to possibly the important support at £18,850.

FTSE 250 index technical chart

FTSE 250