No End In Sight As FTSE Resumes Sell Off
Fiona Cincotta March 17, 2020 4:59 PM
Blink and you missed it. FTSE pares early gains.
Blink and you missed it. The FTSE very briefly moved higher on Tuesday before resuming the sell off. The move lower comes after the Dow closed on Monday down 12.9% in its worst one day sell off in over 3 decades. US futures are managing to cling onto gains.
Governments across the globe put in more stringent restrictions to control the spread of coronavirus. As they do so, the greater the economic hit will be through this process. This still feels far to early to be calling the bottom of the sell off. Companies are still unable to quantify the economic hit that they expect.
Realistically we will only start to see meaningful moves higher in riskier assets when the coronavirus numbers start to improve. Until then investors will fear a recession in the first half of the year, as deep as in the financial crisis. With a depression also plausible.
UK jobs data is due today. Expectations are for unemployment to remain steady at 3.8% in the three months to January. Average wages are expected to tick higher to 3%, up from 2.9%. However, given the data was from before the coronavirus outbreak here, it will be considered as out of date.
Levels to watch
The FTSE is struggling to hold onto earlier gains. The index trades below its 50, 100 and 200 sma on 4 hour chart, a clearly bearish chart. Immediate support can be seen at 5220(today’s low) followed by 4840 (yesterday’s low).
On the flipside resistance can be seen at 5376 (today’s high) and 5700 (high 13th March). A move above this level could negate the bearish trend.
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.
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.