FTSE 100 futures slide amid rising US-China tensions

The blue-chip index saw its early gains eroded on Friday, with it capable of sliding below 6000 next week amid rising US-China tensions.

FTSE 100 futures are trading 2% lower suggesting the index will open lower next week and in weekend markets available with IG, with UK equities rally halted by rising US-China tensions.

The FTSE 100FTSE 100 looked like it would end the week on a high note, only to sees its earlier gains almost entirely eroded on Friday, with the blue-chip index closing 2% lower and only marginally higher to where it kicked off the week.

The FTSE 100 closed at 6076.60 on Friday, with the index looking capable of sliding below the 6000 benchmark next week as investors grow concerned about the macroeconomic outlook.

FTSE 100 hovers below 6200

The FTSE 100 remains skittish around 6200, showing no real desire to break and hold above this level, according to Chris Beauchamp, chief market analyst at IG.

‘This may increase the chances of a retracement, targeting 5900 and then 5650 in the first instance.

‘Rising trendline support from 14 May low comes into play around 6105, while a move above 6250 revives the current uptrend, creating a new higher high,’ he added.

Global stocks rally runs out of steam

Global equities ran out of steam on Friday, as investors grow increasingly concerned about rising tensions between Washington and Beijing.

European socks took a tumble, with the Euro Stoxx 50 closing 1.35% lower – though the index managed to rally to a 4% gain overall this week.

Meanwhile the S&P 500 also opened lower, with the index likely to end the week in positive territory despite the shift in investor sentiment.

Oil unlikely to break $40 in 2020

Oil clawed back some of its early losses on Friday morning, with prices unlikely to tick above $40 a barrel, according to market analysts.

In a recent survey by Reuters, analysts’ consensus data showed that Brent crude and the US benchmark West Texas Intermediate (WTI) would average at $37.58 and $32.78 a barrel this year.

Investors were hoping that production cuts from OPEC+ and the US would help lift prices amid weakening global demand due to the Covid-19 crisis. But analysts remain wary about the economic fallout from rising tensions between the US and China.

The world’s two largest economies have seen relations sour over China’s new security laws on Hong Kong, which has put a stop to a recent recovery in equities and oil prices.

How to trade the FTSE 100 this weekend

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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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