5 Reasons the FTSE is higher
As Brexit uncertainty picks up ahead of a series of Brexit votes in Parliament this week, the FTSE is rebounding from Friday’s 0.7% selloff, its worst in 2.5 weeks. Here are five reasons that the FTSE is in positive territory on Monday:
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As Brexit uncertainty picks up ahead of a series of Brexit votes in Parliament this week, the FTSE is rebounding from Friday’s 0.7% selloff, its worst in 2.5 weeks. Here are five reasons that the FTSE is in positive territory on Monday:
1. Strength in miners. Weak Chinese data released over the weekend has boosted hopes of further stimulus for China. This lifted the heavyweight miners and gave a broad boost to sentiment. Chinese stimulus optimism comes amid growing concerns over the health of the global economy and following a very soft headline NFP figure.
2. M & A chatter. Deal talk boosted the FTSE. Financial stocks +1%, had their best day in over a month, lifted from reports of a possible Commerzbank – Deustche Bank tie up. Mid-caps Charter Court and OneSavings also gained on M&A chatter.
3. Oil rally. Oil stocks traced the price of oil higher. Saudi Arabia pledging to cut crude exports to below 7 million bpd, whilst keeping output below 10 million is supporting the price of oil. Brent +1%.
4. The pound dropped to a three-week low versus the dollar overnight. Sterling weakness is advantageous for the multinationals on the FTSE, which earn abroad and benefit from the more favourable exchange rate. At the time of writing the pound has reversed losses and is gaining ground amid growing Brexit volatility ahead of tomorrow’s meaningful vote. The strengthening pound has pulled the FTSE off session highs.
5. S&P & Nasdaq opened on the front foot. The Nasdaq jumped 1% supported by an Apple upgrade and Nvidia deal.
The FTSE is trading steady around 7125, after falling from session highs of 7180. We would look for a break above resistance at 7200 to support a bullish trend. On the other hand a fall below support at 7070 could see losses extended towards 7030.
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