FTSE Rallies On Chinese Stimulus Hopes
Fiona Cincotta July 15, 2019 2:41 PM
After a brief stint in the red the FTSE has powered higher on Monday as risk on dominated.
After a brief stint in the red the FTSE has powered higher on Monday as risk on dominated. Better than expected results from Citigroup boosting Wall Street and the prospect of stimulus for China lifted the FTSE at the start of the week.
Chinese GDP data showed that the economy grew by 6.2% its lowest level of growth in almost a decade. However, rather than depressing the market, hopes of stimulus for the world’s second largest economy have boosted risk appetite, lifting demand for riskier assets such as stocks. Just as we are seeing with the US, the prospect of easing financial conditions is not being interpreted as bad news for stocks. Instead the prospect of cheaper borrowing in the case of the Fed and support from the PBOC is giving investors plenty of confidence to buy in.
Miners are featuring on the FTSE leader board, with the likes of Antofagasta, Evraz and Anglo American all trading over 1.6% higher. The prospect of economic stimulus in China, the world’s largest consumer of metals is like Christmas come early for the miners.
House builders struggle on falling house prices
House builders dominated the lower reaches of the FTSE following Rightmove data showing that prices slipped by -0.2% year on year. Ongoing political and economic uncertainty means that potential homeowners are delaying the decision to buy a new property. With lingering Brexit uncertainty, the current political climate means that confidence, a crucial ingredient for a strong housing market, has been hit. As a result, both buyers and sellers are hesitating. The likes of Persimmon, Berkeley Group and Barratt Development traded over 1% lower.
FTSE levels to watch:
The FTSE is trading 0.4% higher on the day, snapping a 7 session losing streak. FTSE bulls will be looking for a move above 7550 to confirm a break out, prior to resistance in the region of 7625. On the downside support can be seen in the region of 7450, prior to 7375.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.