After falling on the open, pulled down by Bunzl and the miners, the FTSE climbed higher across the session. A weaker pound and a mixed start on Wall Street lifted the index back towards a 6 month high and resistance at 7475 before falling back to break even.
Miners were under pressure in early trade as concerns over the health of the Chinese economy hit metal prices. BHP also cut its iron ore production guidance in a third quarter trading update. Bunzl was the biggest drag diving 10% in the worst one day decline in three decades, as first quarter sales slowed.
China’s GDP beats estimates
China’s economy grew by 6.4% in the first quarter, retail sales and industrial production data also impressed easing fears over the health of the world’s second largest economy. Yet despite the strong data, investors are nervous that until there is a trade deal between the US and China these levels of growth could be unsustainable.
US Corporate earnings impress
Wall Street opened in a mixed fashion despite the Chinese growth figures and solid US earnings. Morgan Stanley and Pepsico rose after beating forecasts.
Gold hits year to date low
With strong macroeconomic data releases from China and encouraging US corporate earnings demand for safe haven gold declined. Gold slumped to its lowest level since late December at $1273.04.
It's been an ugly few days for gold. We would now expect to see the price consolidate at these levels, before any significant move is either direction appears. Failure at its current levels could bring $1160-40 into play. Near-term resistance can be seen at $1180 and $1185.
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