UK100, H8
The sell-off in commodity-linked stocks and financial stocks has put the UK market under high selling pressure. The sell-off led the FTSE 100 index to fall sharply for a series of 3-day losses, in view of the profit reports for the first quarter of 2022 for some of the leading banks in the United Kingdom.
Reckitt Benckiser, Unilever, Pearson and Hikma Pharma recorded marginal gains with the 6 shares listed on the FTSE 100 in the green, three hours after the session. Only the advances of Polymetal prevented the FTSE 100 from falling even further with the stock rising 3.7% at the beginning of trading, after reporting a 4% increase in annual revenue to $616 million, due to the rise in gold prices. However, after the dip for Gold prices under $1900, Polymetal has opened -2% today.
Significant shares experienced losses, including BP (-5.37%) and Shell (-5.33%). Shares of metal producers such as Rio Tinto plunged -4.89% at the start of trading, Aveva Group -5.8% and Glencore -5.61%. Anglo-American was at the top of the losing charts with a deficit of over -22% for 5 consecutive days, with a slight reprieve today with the share price moving higher by 1.5%. Shares of Lloyds, Natwest and HSBC all traded lower ahead of Earnings later this week.
Technical Analysis
UK100, intraday bias on the second day of the week seems neutral after Monday’s acceleration. The index was temporarily corrected to 38.2% FR at 7335, which will be a small support.
A move back below these levels would put the index in correction mode for 50% FR and 61.8% FR or at least the 200-day EMA. The upward movement will be limited by the small resistance to 7527, before returning the pointer to the downward side. However, a move above this level will bring the indicator back to resistance levels at 7608 and 7654. In the H8 chart, the value is currently around 200 EMA with an oscillation histogram that tends to be lower in the middle line, indicating a correction effort from the 3 consecutive days of losses. Currently today, the UK100 trades lower again at 7240.
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Ady Phangestu
Market Analyst
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