A lot of negative corporate news over the last two weeks has hit a number of top FTSE stocks and created fertile ground for bargain hunters. This morning high volumes of trade are going through banking stocks, which are being bunch-bought alongside HSBC bank after the bank’s weak results hit the share price with a 5% decline. Utility firm Centrica is in a similar position, rising to the top of the FTSE after it reached oversold territory Monday.
The wider background picture is also slightly improving given that new coronavirus cases in China seem to be coming in at a slower pace than before. The one threat for some UK businesses remains Brexit news, where nothing that would be considered positive for UK businesses has made the headlines recently.
The latest – a decision to bring in a point-based immigration system for overseas workers from next January - will hurt in terms of wage costs, particularly industries that rely on low-skilled, low-pay labour such as construction, food processing and social care.
The pound sits still ahead of data
The pound is waiting for a new impulse against the dollar this morning, having been fairly static in the afterhours. This impulse could be provided by a slew of inflation data due later today including the UK Retail Price Index and Producer Price Index. The numbers are broadly expected to show some improvement on the previous month as the December election and Brexit provided consumers with new stability and heightened levels of confidence. Also later today the FOMC minutes and US Redbook data will likely trigger fresh dollar moves.