FTSE 100 futures set to slide after BoJo hits pause on UK reopening
The recovery of British blue-chips remains tied to the reopening of society, with the FTSE 100 index flopping on Friday after PM Boris Johnson opted to postpone a relaxing of lockdown restrictions amid a rise in Covid-19 cases.
The recovery of British blue-chips remains tied to the successful reopening of society, with the FTSE 100 index flopping on Friday after PM Boris Johnson opted to postpone a relaxing of lockdown restrictions amid a rise in Covid-19 cases.
The FTSE 100 ended the week 3% lower, with the index extending losses on Friday, with it falling 1.5% to close at 5897.76 points.
FTSE 100 stutters after Boris Johnson pushes back reopening plans
The catalyst for the FTSE 100 slipping lower this week is British Prime Minister Boris Johnson’s decision to push back his reopening plans by two weeks after a surge in new coronavirus cases emerges in the UK and across Europe.
Johnson regrettably announced that the UK must slow the reopening of the economy, with it time to ‘squeeze that brake pedal in order to keep that virus under control’, he said.
In real terms, this means that the UK government’s plans to reopen leisure centres, gyms, casinos and bowling alleys will be postpone for at least two weeks. After which the government will reassess the situation.
Weak economic data also has hindered UK equities recovery too, with the US economy recording its worst-ever quarterly performance, shrinking by 32.9% from April to June.
‘We’re still digging out of a hole, a really deep hole,’ IHS Markit executive director Ben Herzon said. ‘The second-quarter figure will just tell us the size of the hole we’re digging out of, and it’s a big one.’
UK lenders weigh on FTSE 100, AstraZeneca moves higher still
Standard Chartered saw its stock lose 9% of its value this week to close at 385p per share, while its high street peer Lloyds slipped 11% over the last five days to close at 26p per share.
Meanwhile, the British-Swedish drug maker AstraZeneca keeps continues to go from strength to strength, with the stock exceeding analysts price targets for 2020 and looking likely to see its gains continue after its Covid-19 vaccine showed promise in early stage trials.
FTSE 100: technical analysis
The FTSE 100 has yet to see much of a rebound, and continues to push lower, although yesterday’s dip below 6000 was bought, according to Josh Mahony, senior market analyst at IG.
‘If the price can move back above 6050 then another challenge of 6150 may develop, and gains above this level would help to revive a more bullish view,’ he added. ‘A renewed push below 6000 restores the advantage to the bears.’
How to trade at the weekend
Did you know? You can trade forex and indices like the Weekend UK 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 Weekend UK 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.
This information has been prepared by IG, a trading name of IG Markets 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.
Take a position on indices
Deal on the world’s major stock indices today.
- Trade the lowest Wall Street spreads on the market
- 1-point spread on the FTSE 100 and Germany 30
- The only provider to offer 24-hour pricing
Live prices on most popular markets