FTSE 100 index rallies in after-hours trading
FTSE 100 futures show the index to be attempting a rebound going into Wednesday’s session, following Tuesday’s historic oil price rout.
UK benchmark FTSE 100 index is trading up 1% in pre-market hours on Wednesday 22 April 2020, based on IG data.
IG's pre-market FTSE 100 price estimates showed that the index increased by just over 50 points to push above the 5680 mark as at 03:00 GMT on Wednesday.
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Tuesday’s historic oil price collapse
On Tuesday 21 April 2020, the Footsie fell 2.85% across the day with Brent crude producers leading the charge, as oil prices plunged to historic lows.
WTI crude and Brent crude futures each collapsed as much as 55.83% and 20.05% to as low as US$7.26 and US$20.11 per barrel respectively as at 05:00 GMT on 22 April 2020, based on IG oil futures trading data.
The oil price drops came as oil producers ran out of storage space in the face of the current demand wipe-out caused by the coronavirus pandemic, forcing suppliers to have to pay traders to buy the oil from them, rather than pay heftier storage charges.
Oil major BP closed Tuesday over 3% lower, while Royal Dutch Shell UK shares finished 4.24% down.
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Further downsides for FTSE 100 index ‘look likely’
With oil prices still in negative momentum, IG UK senior market analyst Joshua Mahony believes that further downsides ‘look likely’.
‘The big question is whether we break below 5529 to bring about another bearish signal,’ he wrote on Tuesday, adding that the short-term bearish picture would only be negated with a rally up through 5846 resistance.
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