Over 40 years’ heritage
185,800 clients worldwide
Over 15,000 markets

FTSE down as eurozone markets see mixed results

The FTSE 100 brushed a seven-week low this morning, hit by abysmal eurozone data and more bad news for UK supermarkets.

London skyline
Source: Bloomberg

Those looking for bad news will not be disappointed, with plenty to go around. Although markets in the eurozone are nursing a mixture of small gains and losses, the FTSE is revisiting August lows. In perhaps the most worrying sign, German manufacturing data was revised lower for September, showing a contraction in the sector and hitting a 15-month low. French data was maintained at its same grim level, and budget figures, while displaying commendable Gallic disregard for EU deadlines, underscore how deep France’s problems are.

UK manufacturing was in retreat as well, slumping to a 17-month low, which pushed the pound back through $1.62. Dire news from the supermarket sector shows that investors should still be looking elsewhere, as Sainsbury’s cuts forecasts for the year and Tesco comes under investigation from the FCA. Any rally in supermarket shares will be an invitation for fresh selling, after months in which shorters have made hay. 

It wasn’t a great finish to the third quarter, although the S&P 500 is still holding on to its winning streak, and it looks like the new quarter will be starting on a weak note. With Hong Kong still in lockdown and Ukraine rumbling in the background, the macro environment is not particularly supportive of equity gains. Oil prices are another cause for concern, especially since OPEC doesn’t seem to be wavering in its production commitments. Long-term equity trends have come under pressure but the Dow Jones is still showing a distinct reluctance to drop below 17,000. 

Ahead of the open, we expect the index to start ten points higher at 17,052.

The information 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 Bank S.A. 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 and as such is considered to be a marketing communication.