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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Weekend UK 100 futures show index set for bumpy recovery amid second wave fears

FTSE 100 futures are trading sideways, suggesting that the blue-chip index faces a bumpy road to recovery as fears of a second wave of coronavirus cases begin to materialise.

FTSE 100 Source: Bloomberg

Weekend UK 100 futures are trading sideways, suggesting that the blue-chip index faces a bumpy road to recovery as fears of a second wave of coronavirus cases begin to materialise.

The FTSE 100 closed 0.20% higher on Friday at 6159 points, though the blue-chip index recorded a 1.85% decline over the last five trading sessions with UK stocks recovery showing signs of slowing.

FTSE 100 falters after rebound

The FTSE 100 recovered from the lows of the session yesterday, but gains have stalled below 6250, creating a possible lower high, according to Chris Beauchamp, chief market analyst at IG.

‘A renewed move lower targets 6050 and then on to 5950,’ Beauchamp added. ‘A move through 6350 would be needed to suggest the buyers are back in charge, and would open the way to 6500 and the highs from the middle of the month.’

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Chart1

UK equities give up gains as US stocks slide due to second wave fears

Despite the FTSE 100 closing the week in positive territory, UK equities gave up gains this week, with investors growing increasingly concerned about a second wave of Covid-19 cases in the US and Europe.

Worryingly, it appears that investors’ fears are materialising, with the White House Covid-19 task force holding an emergency briefing as US cases start to soar again, particularly in Texas, Florida and Arizona.

‘Thirty four states across the country, though, are experiencing a measure of stability that is a credit to all of the people of those states... but, nevertheless, there are 16 states with rising cases and rising percentages,’ US vice-president Mike Pence said.

‘We can still take some comfort in the fact that fatalities are declining all across the country,’ he added.

S&P 500 creates lower high

For the S&P 500, while the price rebounded from Thursday’s lows, gains have stalled around 3090, Beauchamp said.

‘A renewed move lower from the current lower high targets 3020 and then 2950,’ he added. ‘If the price can move above 3100 then a more bullish view might prevail, but it would need to clear 3140 and trendline resistance from the 10 June highs to really suggest a fresh move higher is underway.’

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Chart2

How to trade the FTSE 100 this weekend

Did you know? You can trade forex and indices like the FTSE 100 during Saturday and Sunday with IG. Our world-leading trading platform is the only solution to offer weekend trading on indices.

Whether you want to go long (buy) or short (sell) the FTSE 100 based on the above outlook, you don’t have to wait until the markets reopen on Monday to trade.

The weekend prices for indices and forex are quoted separately to their weekday counterparts, based on our view of the prospects for that market given client business and news flow. As a result, you can use these markets to hedge against risk on your weekday positions.

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This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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