Rising covid cases unnerve investors
Fiona Cincotta October 26, 2020 8:35 AM
Rising covis cases and tighter measures to stem the spread of the virus are raising fears that the fragile economic recovery will quickly be derailed.
European bourses start the trading steeply lower as the new week kicks off. Rising covis cases and tighter measures to stem the spread of the virus are raising fears that the fragile economic recovery will quickly be derailed. Fears of a double dip recession are overshadowing upbeat vaccine. Although reports that the UK government is considering reducing quarantine period for covid contacts is helping the FTSE, which hasn’t fallen as steeply as its European peers on the open.
News that the British government is considering a shorter isolation period, reduced from 14 days to 7 days for those who have been in contact with someone who tested positive is offering some support to the UK index, which hasn’t sold off as deeply on the open as its European counterparts
News that the Oxford University / AstraZeneca vaccine produces a robust immune response in elderly people, the group at highest risk is broadly being shrugged off by investors. As is news that the vaccine is likely to be distributed to NHS frontline workers and the most vulnerable in December.
Whilst covid is set to remain a key driver in the market this week, in addition to US elections and US stimulus negotiations, this week is also a key week for corporate releases with UK banks and 4 of the FAANGs reporting, in addition to other big names such as BP, Next, GSK just to mention a few.
Looking ahead it is a relatively slow start to the week with just IFO Business sentiment in focus.
The FTSE trades -0.6%. It trades below its 50, 100 & 200 SMA on the 4 hour chart and below a descending trendline which has been in place since early June – a bearish chart.
Immediate support can be seen at 5760, today’s low prior to 5715, last week’s low.
Immediate resistance is at 5855 50 SMA prior to 5910/20 region where the 100 & 200 SMA sit. A move above 5970 is needed to negate the current bearish trend.
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