Market News & Analysis

FTSE To 7366 As Coronavirus Fears Persist?

Fiona Cincotta January 23, 2020 5:29 PM

The FTSE dropped sharply on the open and remained under pressure across the session, extending losses after Wall Street also opened lower. Fears over the spread of China’s coronavirus continue to knock stocks with exposure to China and weigh on risk sentiment.

Those stocks closely tied to China, such as the heavy weight miners and oil stocks were the hardest hit, along with tourism and travel firms. Burberry also extended losses for a third straight session.

Wuhan, the city with 11 million inhabitants at the centre of the outbreak under lock down. The number of people infected and the number of countries with the virus still rising, investors are growing increasing concerned that global growth could be affected. Investors are attempting to gauge the potential impact on airlines, retailers and to China’s consumption of metals and oil.

Quite simply traders are not prepared to keep risk on the table until there is more clarity over how this will develop. With 16 cases suspected in the US, 4 in Scotland and over 600 in China markets remain fearful.

Levels to watch:
The FTSE dropped 0.8% across Thursday, hitting a 5 week low of 7501 in its 4th straight session of losses.
Immediate support can be seen at 7455/ (low 8th Jan & 50 sma), before the bears will look to target 7366, the 100 sma.
On the flip side resistance exists at 7645 (yesterday’s) , before 7680 and 7730 (high 30th July)

TAGS: UK 100

Find out More

Economic Calendar

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.