FTSE's downward move accelerates
|UK markets are losing ground this morning, as the run of disappointing updates continues, with the FTSE 100 20 points lower in mid-morning trading.
- Strong US session fails to lift FTSE
- Overall bullish picture intact however
- Primark can’t cancel out tough times at ABF’s sugar business
The FTSE 100 is continuing to find itself under pressure, with a drop below 7700 looking likely. Yet more strength in the pound is not helping matters, but overall the index was looking overextended after a remarkable rally from the lows down at 7300 at the beginning of December. Santa duly delivered his usual rally, and it enjoyed a good run into the first half of January, but with Brexit discussions now looming once more and a steady stream of updates from firms coming through the urge to book some profits has clearly got the better of many investors. Nonetheless, from a technical standpoint the breakout above the 7600 highs of 2017 is a positive sign, and some weakness back in this
direction should both take some heat out of the market and also allow others to buy in. At least it makes a change from the relentless grind higher in the US.
ABF’s Primark division continues to deliver the goods, as its budget offering proved irresistible to shoppers in the weeks before Christmas. But the conglomerate nature of the firm, with the sugar division still looking weak, means investors continue to shun the shares. From a November peak of £34, they have suffered a severe decline that today’s statement is doing little to alleviate.
Ahead of the open, we expect the Dow to start 25 points lower, at 26,090.
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