- London's top flight index, the FTSE 100 closed lower on Tuesday following mixed inputs from a stronger pound to positive tone for the UK economy with respect to Brexit headlines.
- The FTSE 100 dropped 0.45% to 7,151.12 as sterling surged to its highest level against the euro since May 2017 and its highest against the dollar since September.
PM May said that if her Brexit deal is defeated in parliament next month, she will table two further votes for MPs to decide what to do next, raising prospects of an extension to Article 50. Should the UK government loses the vote on May's Brexit deal on 12 March, May told the House of Commons there will then be a vote on 13 March to ask MPs if they want to leave the European Union without a deal.
While this might be seen as good news, especially for the pound, therewithin lies the irony for the index. While this might be great news for domestic businesses in the UK and economy as a whole, about 70% of the indexes components derive most of their earnings from overseas and thus revenues in FX means a stronger pound is financially problematic for those companies. On Tuesday, shares with translation risk in earnings were among the worst performers ranging from Europe-focused Vodafone to dollar dependent Experian, British American Tobacco and Imperial Brands.
Best and worst performers
The top three came in as Ocado Group (OCDO) 990.00p 11.71%, Taylor Wimpey (TW.) 172.00p 4.02% and Barclays (BARC) 165.14p 3.72% while the rost of the top flight index were Fresnillo (FRES) 896.60p -8.14%, International Consolidated Airlines Group SA (CDI) (IAG) 617.00p -4.34% and Croda International (CRDA) 4,879.00p -3.58%.
FTSE levels
The 7160/70 level was broken again and a low of 7091 leaves the technical measures in the bear's favour as the prices wilt towards the key support line at 7070 (recent double bottom daily lows (made up of 38.2% Fibo of May 2018 highs to Dec 2018 lows and Feb/Mar 2018 and Feb 8th 2019 lows)). Bulls need to get through the 200-D SMA at the round 7276 level, a moving average that was last tested and breached momentarily back in Sep 2018.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD continues its downward trend for the fourth consecutive day, driven by a stronger US Dollar influenced by the hawkish market sentiment surrounding the Federal Reserve and expectations of prolonged higher interest rates.
GBP/USD: The first downside target is seen at the 1.2600–1.2605 zone
GBP/USD trades on a weaker note around 1.2620 during the early European session on Friday. The decline of Pound Sterling is backed by the growing speculation that the BoE will begin the rate-cut cycle this year.
Gold ends Q1 2024 at record highs, what’s next?
Gold is sitting at an all-time high of $2,236, lacking a trading impetus amid holiday-thinned conditions on Good Friday. Most major world markets, including the United States are closed in observance of Holy Friday, leaving volatility around Gold price highly subdued.
Ripple's move above this key level could trigger nearly 50% rally for XRP
Ripple price has overcome a critical resistance level and flipped into a support floor on the weekly time frame. This development happened while XRP tightly consolidated for roughly 250 days.
US core PCE inflation set to ease in February on month as Federal Reserve rate cut bets for June mount
The core Personal Consumption Expenditures Price Index is set to rise 0.3% MoM and 2.8% YoY in February. The revised Summary of Projections showed that policymakers upwardly revised end-2024 core PCE forecast to 2.6% from 2.4%.