Financial stocks dragged the FTSE 100 back from a one-month high on Friday, losing 45.6 points and closing at 7496.8 as the threat of an Italian debt downgrade weighed against HSBC, Lloyds and Barclays. Moreover, domestic politics take focus with the Conservative Party Conference (Sunday-Wednesday). Following the unsuccessful Brexit meeting in Salzburg, Brexit optimism has subsequently faded. As such, market participants will be keeping a keen eye on the party conference.
In economic news, the GDP (YoY) numbers ticked lower on Friday to 1.2%, missing the estimate of 1.3%. Total Business Investment also missed estimates (-0.7% vs 0.5%), along with the Current Account numbers (-20.3B vs -19.4B). Today, investors’ main focus will be on the Manufacturing PMI which is set to be released at 08:30 GMT.
The FTSE broke our uptrend and retested it from below at 7535, forming a lower high on the hourly chart, and is trading below the 20 and 50 period SMA. Negative momentum will continue as long as our downtrend is respected.
Support: 7477.8 7442.7
Resistance: 7519.6 7532 7556.1