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The UK 100 is sharply down, dragged lower by London’s hefty Resource sector (20% of the index). Miners are hurting from the combination of stronger USD and sharply lower metals prices (copper at 12-month lows, gold close to 13-month lows), while the oil majors BP and Royal Dutch Shell are weighted down by the unexpected build in private API crude oil stocks last night, which sent Brent Crude international marker lower. Investors are also nervous over the geopolitical back-and-forth between US and Turkey, as neither side appears ready to back down over recent confrontation that sent the Turkish lira to new lows and raised a spectre of FX contagion across Europe.
Contributors: UK Index -60pts, pressured by the Miners (weak RMB, strong USD, copper prices falling), Energy (oil prices falling, strong USD), HSBC/VOD/PRU (heavyweight, negative momentum), BATS/DGE/RB (profit taking) and BARC/LLOY/STAN (risk off). Struggling to keep UK Index afloat are GSK (positive HIV drug trial), WPP (momentum) and ADM (results).
Technicals: The UK 100 is aggressively testing the floor of a steep week-long falling channel
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The UK 100 is aggressively testing the floor of a steep week-long falling channel
Watch levels: Bullish 7600, Bearish 7545
Solid Green line
Possible support
Solid Red line
Possible resistance
Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.
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Prepared by Michael van Dulken, Head of Research