FTSE Turns Positive
Fiona Cincotta November 30, 2020 9:36 AM
European bourses are heading lower in early trade on Monday as investors pause for breath after a phenomenal rally across the month of November. Some European benchmark indices have surged over 20% higher. The FTSE, which has reversed earlier losses is outperforming its peers.
European bourses are heading lower in early trade on Monday as investors pause for breath after a phenomenal rally across the month of November. Some European benchmark indices have surged over 20% higher. The FTSE, which has reversed earlier losses
Oil stocks are the biggest drag on the FTSE with the likes of BP and Royal Dutch Shell – over 2%, tracing the commodity lower. Oil has dropped almost 1% after an informal OPEC meeting on Sunday revealed that divisions remains over whether to extend production cuts beyond January. The group will meet today to hammer out plans for output in the new year, failure for the group to agree a new deal means that the originally planned output increase of 2 million more barrels a day will come into effect.
As risk sentiment rose across the previous week a demand for stocks rose, safe haven Gold fell out of favour, closing below its 200 day moving average for the first time since January in an ominous sign. Precious metal miner Fresnillo is under pressure down 3.4% in the first hour of trading.
Looking ahead, UK mortgage approvals will keep house builders in focus. Approvals have been particularly strong across recent months as prospective buyers look to take advantage of the government’s stamp duty holiday scheme, which is set to run until March.
German inflation data is also due later. Expectations are for inflation to remain subdued in disinflation as the Eurozone’s largest economy extends its lockdown until 20th December.
The FTSE continues to consolidate in the horizontal channel 6300 – 6515. The index rebounded off the lower band of the channel at the end of last week and is heading back towards the upper band at 6515. A break above this level could see the FTSE advance to 6670 a level last seen in March. On the flip side immediate a break through 6300 could open the door to horizontal support at 6120 prior to 200 day moving average and psychological support at 6000.
StoneX Financial Ltd (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.