FTSE swings in narrow channel

The rising number of corona cases in the southern parts of the US, particularly among the younger population, and the sharp loss on Wall Street on Friday made investors stop and rethink the rising trend in US stocks since April.

Charts (5)

The rising number of corona cases in the southern parts of the US, particularly among the younger population, and the sharp loss on Wall Street on Friday made investors stop and rethink the rising trend in US stocks since April.

The FTSE is trading within a narrow channel this morning, mostly lower, with little corporate news to help the index out of the rut. Pharma companies are among the top gainers, as are housebuilders and retail stocks, a week into the reopening of shops in the UK. For the same reason delivery group Ocado is losing ground as shoppers return to the high street, albeit in modest numbers.

The Wirecard scandal is beginning to spill into the British market after many of the users of the banking app powered by the Wirecard Solutions Technology, a UK subsidiary of Wirecard, have had their accounts frozen since the company filed for insolvency Thursday.

Diageo joined a group of the largest UK consumer goods firms pulling their advertising from Facebook and Twitter over the social media platform’s lack of action on racial issues.

Pound dips ahead of Brexit trade talks

The pound dipped at the start of the day but then recovered to trade marginally higher than over the weekend as the UK went into a fresh round of Brexit trade talks in Brussels. Investors are not holding out much hope for a positive outcome of this round of trade talks, particularly as the Prime Minister has repeatedly said that the UK is ready to walk away from the EU without a trade deal . The medium term trend of the pound’s decline against the dollar remains intact and sterling also hit its lowest point against the euro in three months.

Meanwhile, the UK will sell a record £275 billion of bonds by August, more than twice the amount of borrowing in the whole of the past financial year, to pay for the massive government spending program during the corona outbreak.

More from FTSE 100

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.